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The Maui News: “A&B planning pongamia project on former HC&S land”

A&B planning pongamia project on former HC&S land

Tree’s seed oil can be used for biofuel

A demonstration project to grow pongamia on old Hawaiian Commercial & Sugar Co. land in the Maalaea/north Kihei area could get underway in mid-May, an Alexander & Baldwin official said. The tree from India and Australia could produce 400 gallons of biofuel per acre from its seeds. — TerViva photo

Alexander & Baldwin is close to formalizing a partnership with a seed oil producing company on a 250-acre demonstration project to produce biofuels from the pongamia tree on old sugar fields with planting possibly to begin in mid-May.

Darren Pai, A&B spokesman, said Friday that pongamia, a long-living tree from India and Australia, also offers the possibility of producing food and fuel — with cattle grazing or other crops grown between the tree rows.

“We believe pongamia can help diversify agriculture production on Maui while also potentially addressing our community’s need for renewable fuels and bioenergy,” Pai said. “Transitioning the former plantation lands into diversified agriculture provides an opportunity to look at growing more energy crops locally.”

A&B has been in discussions for a few years with Oakland, Calif., based TerViva, which has been working on smaller pongamia projects in Hawaii, he said. “The transition of the former sugar plantation resulted in an opportunity to work together on a larger project,” Pai said.

Since Hawaiian Commercial & Sugar Co. harvested its last sugar cane in December, parent company A&B has been looking for uses for the 36,000 acres of fields in Central and Upcountry Maui. The company has ongoing livestock partnerships and is looking at working with MauiGrown Coffee on expanding its coffee fields to old sugar land, possibly near the intersection of Omaopio and Pulehu roads or below Haliimaile.

TerViva is a 6-year-old company with offices in Hawaii, California and Florida that grows the orchard crop pongamia, a nongenetically modified organism tree that can be grown with little or no irrigation, according to the company’s website.

The seed oil from the tree may be used to produce biofuels. The residual pongamia seed cake, which is high in nitrogen and protein, can be used in fertilizer, animal feed supplements or as a feedstock for other bioenergy, including biogas production, Pai said.

A&B will be “partnering with TerViva on an initial 250-acre demonstration project with the possibility of expanding up to 2,000 acres or more if all goes well,” said Pai.

The two companies “are close to finalizing our partnership,” Pai said, adding that planting could begin in mid-May. When asked if A&B would lease the land to TerViva or grow the plant itself with TerViva, Pai said: “TerViva will grow the pongamia and manage the project with support from A&B.”

The Maalaea/north Kihei site was selected because of good sun exposure, productive soil, access to irrigation and other conditions like grade and accessibility, he said. Farming the tree will require some drip irrigation, but the water needs will be less than equivalent acres of sugar cane.

“Pongamia has grown well in smaller projects on Oahu and Hawaii Island without any environmental concerns,” Pai said.

Pongamia produces an annual harvest of seeds similar to soybeans, he said. TerViva estimates that 400 gallons of oil can be produced per acre.

“The purpose of our project is to confirm pongamia’s agronomic suitability in Central Maui and to determine production costs and yields at commercial scale,” Pai said.

It was not clear if A&B would process the plant on Maui. Pai said that A&B and TerViva “will evaluate together the best uses and optimal logistics for the crop, which could involve processing the crop on Maui.”

Pai said the processing of pongamia is similar to that of soybeans “and at scale could create additional jobs beyond field-related activities.”

Joanne Ivancic, executive director of the nonprofit Advanced Biofuels USA, had good things to say about TerViva.

“I have been impressed with the young people at TerViva who work with pongamia,” said Ivancic in response to an earlier story about A&B’s diversified agriculture plans that mentioned pongamia. Advanced Biofuels promotes biofuels for energy security, economic development and pollution control.

She said pongamia, a legume that fixes nitrogen to the soil, may be better for the land than hemp or sunflowers, which can be quite demanding of the soil. Pacific Biodiesel is working on a 115-acre sunflower demonstration plot on old Wailuku Sugar land near the Kuihelani and Honoapiilani highway intersection and hemp has been promoted as a farm crop for old HC&S lands, including by Rep. Kaniela Ing. The South Maui representative teamed with Oahu Rep. Cynthia Thielen during the last legislative session on possible measures to help HC&S transition to industrial hemp.

“At a conference in Washington, D.C., in early March, I was impressed with TerViva’s vision of an eventual multiuse way to grow these legume trees, incorporating pastureland forage so that the manure from the cattle will help to fertilize the trees and the grasses will serve to hold the soil,” Ivancic said.

* Lee Imada can be reached at leeimada@mauinews.com.

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The Maui News: “Water company seeks sale of 4,500 acres of watershed land”

Water company seeks sale of 4,500 acres of watershed land

Deal would not include the Waikapu ditch or any water delivery systems

Avery Chumbley

WAILUKU — Eight years of growing losses have prompted Wailuku Water Co. to ask the state Public Utilities Commission for permission to sell about 4,500 acres of its land in the West Maui Mountains.

The commission long ago suspended any asset sales while stream-flow standards in a contested case hearing were being worked out. On Friday, the company filed a request with the commission asking it to lift the suspension.

“Nine years have passed,” Wailuku Water Co. President Avery Chumbley said Tuesday. “We are quite frankly in a financial situation where we can no longer continue to sustain the losses

that we have for the last eight years in a row. And we have an opportunity to sell some of the underlying land.”

The company wants to sell about 4,500 acres for $3.4 million to Ting Ranch LLC, a Hawaii limited liability company managed by Duane Ting, according to the docket. The property would include a 3,425-acre parcel mauka of the King Kamehameha Golf Club and about 1,100 acres just above the first parcel.

The sale only involves the land and would not include the Waikapu ditch or any other water delivery systems in place. Those would remain with Wailuku Water Co. That way, Ting Ranch doesn’t need to apply to the commission to become a regulated company.

“It makes (the sale) a fairly cleaner request,” Chumbley said.

Wailuku Water owns about 13,170 acres of West Maui watershed lands. Although it is a private company, the PUC has deemed it “a quasi-public utility because we’re delivering (water) to more than one person,” Chumbley said.

In 2007, the company filed for a certificate of necessity from the PUC, allowing it to provide nonpotable water through its ditch distribution system and establish rates for delivering the water.

However, the PUC decided to suspend the company’s docket in 2008 while the Commission on Water Resource Management finalized in-stream flow standards, determined potential users and issued permits as part of a contested case hearing on surface water use permits.

“The PUC felt that until that decision was made, it would be premature to issue a certificate of necessity,” Chumbley said.

As part of the suspension, the company could not take new customers, raise its rates or sell its assets, he explained. Wailuku Water has lost increasingly more money since then.

Company revenues recently took a hit with the closure of Hawaiian Commercial & Sugar Co. and storm damage in Iao Valley. The end of HC&S operations resulted in about a 35 percent decrease in revenues in 2016, “the single largest loss of revenue” for the company, Chumbley said. After flooding in Iao last September, “the county was not using water at the same level they had in the past,” meaning a loss of more revenue. In 2016, the company lost $459,900, according to the docket.

Sorting out the case hearing has taken time, given that there are more than 110 users and applicants for water, including the Maui County, which is asking to increase its intake from the Iao-Waikapu ditch from 1.5 million gallons a day to 3.2 million. The hearing ended last September, but the case was reopened so stream-flow standards could be re-evaluated in light of the closure of HC&S, and that impact on parent company Alexander & Baldwin’s need for water.

If Wailuku Water is allowed to sell the land to Ting Ranch, it would “be able to continue to operate for a while, but it won’t solve the problem in perpetuity,”Chumbley said.

Meanwhile, the suspension also blocks the county’s proposed purchase of 8,764 acres of Wailuku Water’s land, including its water infrastructure, for about $9.5 million. If the county goes through with the purchase, it also will operate the water distribution system on the land that Ting Ranch wants to buy.

But if neither of the purchases happen, “there’s a high probability that Wailuku Water Co. will not survive,” Chumbley said.

Wailuku Water delivers water to more than 45 users. It also provides water to the Department of Water Supply, which treats it so it can be consumed as public drinking water.

Regardless of whether the county or Wailuku Water operates the system in the future, users will still need to pay a fee for delivery of the water, “unless their water comes directly off of the stream to their property, which is pretty rare,”Chumbley said.

The company’s request only asks for the suspension to be lifted so the sales can be made; it will not allow the company to raise its rates or add any customers. He added that it could take two months or longer before the matter could get a hearing because the PUC will have to wait to see if parties involved in the contested case hearing file objections.

* Colleen Uechi can be reached at cuechi@mauinews.com.

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The Maui News: “California company buys 300-plus acres of former sugar lands in Paia”

California company buys 300-plus acres of former sugar lands in Paia

Development options left open, but no plans to ‘flip it’

A red outline on a Google Maps image of Paia shows the boundary of the 339-acre parcel of former sugar cane land purchased by EC Paia LLC from Alexander & Baldwin. • Google Maps image

More than 300 acres of former sugar cane land at the edge of Paia town has recently been bought for almost $10 million by a private company based in Northern California.

According to Maui County property tax records, the $9.9 million sale of 339 acres of Hawaiian Commercial & Sugar Co. land was made on Dec. 20 to EC Paia LLC. It lists its member/manager in Hawaii business records as Eagle Canyon Capital. Its head is Sam Hirbod, who said he has a home in Wailea and has been coming to Maui for 20 years.

On Tuesday, Hirbod told The Maui News that his family investment and development company has no firm plans for the Paia land, which is mostly set aside as agriculture and a portion in open space.

The owner could seek a change of zoning for other uses, including commercial, said Planning Department Director Will Spence.

The land is adjacent to and mauka of Hana Highway and mauka of the Paia basketball courts. Baldwin Avenue borders the property to the northeast, and it includes the Paia minibypass.

“We have just started the process of just studying the area,” Hirbod said via cellphone from Texas while on a business trip.

His company has developed multifamily housing, commercial projects and community centers on the Mainland, he said, adding that it did not buy the property to “flip it” — that is, making some improvements and then selling it quickly for a profit.

“We are very excited about the opportunity. We looked at some of economic benefits. We understand that a portion of that property was allotted by the county to account for the growth within Paia,” Hirbod said.

Spence said Tuesday that he has to do more research to determine specific allowable uses for the property.

Hirbod explained that he got involved in the land sale “fairly late,” and that the transaction had been between A&B and Paia businessman Michael Baskin, who owns the Paia Inn. Hirbod said his company bought out Baskin’s portion.

Hirbod’s company was known as Pacific Convenience & Fuels of San Ramon, Calif.  Now the business is focused on investments and developments, Hirbod said.

The former company acquired a ConocoPhillips convenience store/gas station operation in the late 2000s, according to reports.

Now, the company will start setting up meetings with the county, the mayor and Maui County Council members as well as those with an interest in the area, Hirbod said. Community meetings will be held after the company gets a sense of its plans for the land.

“I’m a reasonable person who will always listen to good reasonable ideas. If there are reasonable ideas out there I want to hear them,” Hirbod said.

“Our mindset is long-term thinking. Our mindset is respecting (the) culture. Our mindset is adding value to the island, to the city of Paia, to the residents and to the county, as well as ourselves. It’s not that we want to do something as a cost to, a loss of, some other party,” he said.

“I love Maui. I had  opportunities (to do business) on other islands,” said Hirbod, who added that this is his first commercial acquisition in Hawaii.

“When I’m there, I’m home,” said the 46-year-old, who lives in Wailea when on the Valley Isle but also has owned other Maui properties.

Alexander & Baldwin spokesman Darren Pai said via email on Tuesday: “This sale was unique in that we received an unsolicited offer to purchase the property, and we determined that due to its size and location, a sale would not negatively impact our efforts to pursue our diversified agricultural plan.”

A&B is the parent company of HC&S, which closed its more than 100-year-old Central Maui sugar plantation last year. The company aims to transform much of its 36,000 acres of former sugar lands into diversified agriculture.

Maui County spokesman Rod Antone said the Paia sale “kind of caught us by surprise.”

Antone said it was always Mayor Alan Arakawa’s intent to approach HC&S and A&B to keep some of the property open as green space.

He explained that with Baldwin Beach Park across the street and the basketball courts at Lower Paia Park, the stretch would become a north shore regional park. This “Kalama Park” of the north shore would include lands along the coastline that A&B donated to the county when it bought 4 acres for $7 million for the county service center at A&B’s Maui Business Park II in Kahului.

Green space mauka of Hana Highway is envisioned for open space in the area, he said.

“So it will be green across of green,” Antone said.

The open space would not be an entire parcel, but perhaps a football-field-length sized area across from the entrance of Baldwin Beach to the minibypass. The green space could be half as wide of a football field stretching mauka.

“We felt it was the right thing to do for the north shore,” Antone said.

But he added that county officials would work with the new landowners on any possibilities.

Pai said A&B was not aware at the time of the sale of any specific requests from Arakawa.

“But we did note (to the buyer) that the parcel contained the ‘mini Paia Bypass road,’ and took steps to ensure in the sales contract that the county retained its rights to the bypass road,” Pai said.

Hirbod said he “did hear wind” of the county’s wishes for the land, but he said he had not spoken with the county about it.

“We are more than open to collaboration and doing what is right for that property,” he said. He said he’s “always open to listening” to county officials’ concerns or ideas.

* Melissa Tanji can be reached at mtanji@mauinews.com.

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The Maui News: “Mahalo and aloha to plantation life”

Mahalo and aloha to plantation life 

Former Puunene resident Stan Mukai (front) poses Friday next to a banner he had made as a “final farewell” to Hawaiian Commercial & Sugar Co., which ended its sugar operations last month. Standing behind him at the Alexander & Baldwin Sugar Museum in Puunene are former Puunene plantation camp residents, including some from Mukai’s camp, Spanish B. Mukai, 78, now an Oahu resident, said that the banner will be given to the museum to archive with other items from the mill’s closure.

The Maui News / MELISSA TANJI photo

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The Maui News: “Council OKs land use changes for A&B housing project”

Council OKs land use changes for A&B housing project

Panel also adopts resolution to end parking concession for Moku‘ula group

Land use entitlements for a portion of Alexander & Baldwin’s Waikapu residential community received final approval Friday by the Maui County Council.

The council approved on second and final reading measures to amend the Wailuku-Kahului Community plan from agricultural district to Waiale Project District South, along with zoning changes from agricultural district to Waiale Project District South (conditional zoning) and to establish permissible land uses, standards of development and allocation of land for the project.

The bills affect nearly 123 acres at the corner of Kuihelani Highway and East Waiko Road. The project is the first phase of A&B’s 545-acre Waiale master-planned community. The north phase of the project will be developed later.

On the south portion of the project, plans call for construction of up to 950 single-family and multifamily homes, with parks, open space and commercial areas. Construction costs are estimated to be more than $219 million.

The project’s next step is to work with the county Department of Planning on the subdivision’s neighborhood design, A&B Properties Vice President Grant Chun  said. The layout and design portions will need to go before the Maui Planning Commission for review and approval, he said.

He added that in the next two to three years, A&B hopes to put up some homes in the first phase and to submit paperwork for permits needed for the north portion of the project.

In May 2012, the state Land Use Commission voted to reclassify more than 500 acres in Waikapu for the Waiale community. The overall project called for building 2,250 homes, commercial areas, a middle school, public facilities and parks in an area bisected by East Waiko Road with Kuihelani Highway to the east and Honoapiilani Highway to the west.

In other action, council members adopted a resolution to end a parking lot concession on county property in Lahaina by the Friends of Moku’ula. The nonprofit was formed to restore and preserve the historic Moku’ula island and Mokuhinia pond, which was a Hawaiian royal residence.

A committee report questioned the group’s financial management and its responsiveness to community and council inquiries about the concession.

The report added that the group’s executive director reported Nov. 29 that the organization has had trouble documenting the use of concession funds since 2003.

Executive Director Blossom Feiteira told the committee that an internal audit showed that the group used parking lot concession money for administration and operations.

“She acknowledged the organization did not adequately spend the money the way they were supposed to for the first 10 years,’ “ the report said.

Documents provided to the committee suggest that the organization directed parking proceeds to its for-profit Ka Lua O Kiha and that the two entities share employees, operating costs and board members. The report notes that parking concession proceeds were supposed to be used only for “restoration and preservation purposes.”

Testifying before the council on Friday, Feiteira said she was in support of the resolution to end the parking concession with the group.

“I think the time has come for financial accountability to be put in place,” she said. “To make my job as an (executive director) easy.”

Feiteira supported first-reading passage of a bill to establish a Hawaiian Cultural Restoration Revolving Fund for the deposit of all proceeds from the parking concession.

According to council documents, the fund shall be used for the “preservation and restoration of Hawaiian historic and cultural artifacts and sites in the county, including the Mokuhinia ecosystem restoration project.”

The concession would be under the control and management of the county or the county’s designee, the documents said.

The measure passed first reading Friday. It requires another council vote for final passage.

Testifier Tama Kaleleiki told council members not to give any more money to the Friends group, calling them “irresponsible and negligent.”

He pointed to the failure to report parking concession finances to the county and the community.

“It’s too late to ask for any patience and understanding from the county,”Kaleleiki said.

He also asked the county to recoup any county money that the organization may have as well as pursue legal action against Friends of Moku’ula for mismanagement.

Another testifier, Mahina Martin, said it’s important “to keep the funding going” to help protect and preserve Moku’ula and Mokuhinia.

* Melissa Tanji can be reached at mtanji@mauinews.com.

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The Maui News: “With HC&S closing, MECO needs more on-demand power”

With HC&S closing, MECO needs more on-demand power

Maui Electric Co. is seeking approval to install three used diesel power generators temporarily for times of peak power use and to make up for reserve capacity that will be lost when Hawaiian Commercial & Sugar Co. closes its sugar plantation and unplugs its Puunene Mill as a source of backup electricity for Maui’s power grid.

According to a MECO application filed Tuesday with the state Public Utilities Commission, HC&S’ pending closure late this year and the ending of its purchase power agreement with the utility will reduce the island’s reserve power capacity. Now, the burning of bagasse, coal and oil at the Puunene Mill provides up to 4 megawatts of “firm” power and an additional 12 megawatts of emergency power, according to the utility.

“With this reduction to the system, the company is in need of additional firm generation sooner than anticipated to maintain reliability as customer demand increases,” MECO’s filing says.

(“Firm power” refers to electricity that a supplier guarantees will be available when needed. Wind and solar power are variable, or “as available,” sources of power. “Reserve capacity” is extra power-generating capacity available to meet unanticipated demands for electricity, if needed, such as if a generator were to break down.)

The utility says the temporary power generation project is “a key component of a larger portfolio of measures that are needed to help mitigate increasing reserve capacity shortfalls that are anticipated to arise on the company’s Maui island system as early as March 2017 . . . and continue until the installation of the next dispatchable firm capacity resource in 2022.”

The highest reserve capacity shortfall is expected in April and May of next year, when MECO’s largest power generators at Maalaea are taken offline for scheduled maintenance.

Earlier this year, the PUC approved MECO’s request to build a new, $13 million substation in a sugar cane field adjacent to the intersection of Kuihelani Highway and Maui Lani Parkway. Construction is targeted for completion as early as June. The diesel generators would be installed at the same time and location as the Kuihelani substation.

MECO already has identified a 4-megawatt shortfall of power generation capacity as of April, as well as additional, ongoing near-term reserve capacity shortfalls for 2018 to 2022.

The three temporary generators would burn “ultra-low sulfur diesel” – with each rated at being able to deliver 1.65 megawatts, for a total of 4.95 megawatts of firm power generation for the utility’s reserve-capacity use, according to the filing.

“The pending land acquisition of approximately 2.6 acres for the Kuihelani substation will provide sufficient space to allow for the placement of the temporary distributed generation units,” the utility says. “The temporary distributed generation units will provide customer benefits through increased service reliability, improved operational flexibility and support of the projected reserve capacity shortfall beginning in March 2017.”

The generators are expected to operate only during peak-load hours, typically between 5 and 9 p.m., according to the utility.

The power-generation units are expected to be removed and sold for nearly $1.7 million after about five years when the reserve capacity shortfall is anticipated to be eliminated by the installation of new firm power generation.

According to MECO, other reserve capacity shortfall mitigation measures include:

* Repurposing the company’s existing battery energy storage system.

* Relying on as-available wind resources.

* Pursuing company- or customer-owned, utility-dispatched distributed generation projects.

* Requesting voluntary customer power cutbacks.

* Accelerating the installation of the next firm generating unit or energy storage systems.

* Expanding the company’s fast-demand-response program from 0.2 megawatts to 5 megawatts.

(The fast-demand-response program allows eligible commercial customers to reduce power consumption proactively during times when electricity demand exceeds generation capacity. Customers enrolled in the program are rewarded with financial incentives.)

So far, MECO has four customers in the fast-demand-response program, which helps the utility maintain a stable power grid and prevent unplanned outages. MECO is seeking PUC approval to expand the program.

MECO noted that, of its options, the Kuihelani temporary distributed generation units, the expanded fast-demand-response program and improved battery energy storage system “are uniquely able to help reliably address the near-term reserve capacity shortfall beginning in 2017.”

When the PUC approved the Kuihelani substation project, state regulators conceded that the substation would be needed as early as June of next year, but they reminded MECO officials that they need to do a better job of planning for a transition to renewable energy.

The commission has established a blueprint for Hawaiian Electric companies to move out of the power-generation business and toward managing and dispatching electricity from dispersed independent operators and from consumers, including those with rooftop solar panels.

In early January, HC&S’ parent company Alexander & Baldwin announced the closure of Hawaii’s last sugar plantation at the end of this year. Layoffs have been coming in waves, but the closure will result in lost jobs for more than 600 workers.

The company has that said it plans to turn to diversified agriculture, including bioenergy crops and cattle grazing, for some of its 36,000 acres in Central Maui.

* Brian Perry can be reached at bperry@mauinews.com.

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The Maui News: “Budget panel supports proposal to acquire land in A&B business park”

Budget panel supports proposal to acquire land in A&B business park

WAILUKU – The Maui County Council Budget and Finance Committee recommended passage of a resolution Tuesday that would allow the county to move forward with its proposal to buy about 4 acres in Alexander & Baldwin’s Maui Business Park II in Kahului.

The deal also involves a 30-acre land donation in Paia for the county to expand Baldwin Beach Park along the north shore.

“This service center issue has been discussed for over two years, and it’s time for us to get moving,” committee Chairman Mike White said. “It’s certainly an outstanding proposal when you consider the gift of the land we’ve been after for quite some time.”

The Maui Business Park II space is one of three proposals the council has been mulling over since April in efforts to find a new service center location. County officials have said that the Division of Motor Vehicles and Licensing, the Real Property Tax Division and the Treasury Collections offices, currently housed at the Maui Mall, need to be moved because the new owners of the mall envision commercial uses for the space.

Mayor Alan Arakawa also has said that there is better value for the county if it builds its own center because the county pays more than $475,000 annually in rent for the Maui Mall space.

“This is a win-win, and an excellent opportunity for the community in several ways,” resident Jonathan Starr testified Tuesday. “We know that the lease existence in the Maui Mall is untenable, and we need to move forward and now, with the best bond rating we’ve seen in the state and historically low interest rates, now is the time to move forward.”

Other testifiers expressed support for the purchase, and the attached 30-acre land donation in Paia.

“I grew up surfing Baldwin Beach. It’s a beautiful stretch of land and important to my community and my friends,” said Peahi resident Pat Simmons Jr. “I hope to see that land preserved for future generations, hopefully my kids and my kids’ kids will enjoy that land someday.”

But Council Member Riki Hokama expressed concern with tying the purchase of 4 acres in the Maui Business Park with the 30-acre land donation. He was the only council member who voted against advancing the resolution to the full council.

“While I agree with you that this deal has merits . . . I would prefer the gift be separated out. For me, I don’t like the taste that gives me . . . that the county can be bought,” Hokama said.

He added that the purchase was “a hell of a lot more land than we need for the stated purposes,” and he suggested the county consider the possibility of selling some of the land and “using that money for public needs.”

But separating the land donation from the 4-acre purchase is a proposal that has not yet been fully vetted, and White said, in response to Hokama’s comments, that “life isn’t always that easy to separate into clear issues.

“This is a situation where acquisition and construction will allow us to offset ongoing costs, and I think that’s the only reason we’re looking at moving forward, because we’re in a position to create such a structure that will allow us to save money,” White said.

Advancing the proposal does not mean the council would stop considering the other proposals “in due course,” White said.

The council also is considering:

* 3 acres in the Maui Lani Village Center for approximately $14 million that would include “turn-key” construction of a 24,000-square-foot two-story building. The cost includes $5.3 million for the land; $8.1 million for construction of the building, and $600,000 for architectural and engineering costs.

* 5 acres for $6.6 million at the Kehalani Village Center in Wailuku. Landowner RCFC Kehalani would donate a nearby 14-acre parcel at the corner of Waiale Road and Kuikahi Drive.

Arakawa had said in a committee meeting Aug. 1 that he would like the county to purchase both the A&B Maui Business Park II and the Kehalani Village Center site packages, though if he had to choose just one, it would be the A&B property in Kahului.

In other action Tuesday, the committee recommended passage of a measure to advance Haiku Community Association $75,000, or half of its total $150,000 grant, up front for needed repairs to Kalakupua playground at Giggle Hill in Haiku. While the county typically grants only 25 percent of grant money in advance to project implementation – with the rest to be paid in reimbursements – the association has said it could not afford fronting the money for the repairs.

“We are a small community association. We’re not a for-profit business,” said Netra Halperin, who serves as co-chairwoman of the association’s playground committee. While volunteers have managed to fundraise $26,000 for the project, the biggest hurdle is the playground’s footing, or ground surfacing, which is slated to cost about $60,000.

Halperin and others asked for a “cash grant” with 100 percent of the grant money paid up front, promising “we’d be responsible stewards of that money.”

Council members agreed to advance 50 percent of the grant as a compromise, saying that as long as the association provided its receipts, reimbursements would be expedited.

“I think 50 percent is a great compromise, because at least they’ll have money to do what they need to do. If they get their receipts in, we’ll provide their reimbursements ASAP,” said Council Chairwoman Gladys Baisa.

Council Member Mike Victorino rallied for the cause.

“We don’t want to hold these people back in any way, shape or form,” he said. “We want to get these repairs done in the next six months at the most, so we can have these kids back on the playground.”

The playground was closed two years ago for safety reasons.

* Eileen Chao can be reached at echao@mauinews.com.

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The Maui News: “A&B says land sale will make way for Target”

A&B says land sale will make way for Target

Alexander & Baldwin will close a $40 million, 24-acre Kahului land sale today to make way for the development of national retailer Target, A&B Chairman and Chief Executive Officer Stan Kuriyama said Thursday while announcing the company’s third-quarter operating and financial results.

The land sale amounts to $1.65 million an acre, he said, noting that it follows a September sale of 209 acres in Waikapu, at $25,000 an acre, to Maui County for its Central Maui regional park complex.

“Most of the proceeds from these two sales will also be reinvested in the acquisition of the Pearl Highlands Center,” Kuriyama said. The closing of the sale on Oahu was in September.

The Pearl Highlands Center purchase made A&B Hawaii’s second-largest owner of retail properties in the state, he said.

The largest is General Growth Properties, which owns Whalers Village in Kaanapali and Ala Moana Center on Oahu, among other properties.

In April, Property Development Centers, a wholly owned real estate subsidiary of Safeway Inc., announced it had reached a deal with A&B to purchase the property at the corner of Puunene Avenue and Hookele Street, near the Zippy’s restaurant.

PDC said it would, in turn, sell 12 acres to Target, which will serve as the center’s anchor retailer.

A&B’s real estate operations performed well in the third quarter, Kuriyama said, highlighting the company’s purchase of 27 properties in Kahala, one of Oahu’s “premier residential neighborhoods.”

Chris Benjamin, A&B president and chief operating officer, said that the company spent time “cleaning up and readying” the Kahala properties for sale. As of Thursday, four lots had sold, and the company was evaluating offers or had sales in various stages of contracting, he said.

On Maui in the third quarter, A&B sold six units at its 150-unit Kai Malu at Wailea project, with units going for $1 million to $1.4 million, Benjamin said. The company is seeking Maui County regulatory approval for a 70-unit condominium project in Wailea, and it has the ability to do another 75-unit development, if there’s enough market demand, he said.

Overall, A&B’s adjusted net income for the third quarter was $5.6 million, or 13 cents per share, compared with adjusted net income of $13.8 million, or 32 cents per share, in the same quarter in 2012, the company said.

“Our net income also reflects a $7 million decline in agribusiness operating profit compared with last year’s third quarter, which was anticipated and resulted from one less sugar voyage and lower sugar prices,” Kuriyama said.

A&B also completed on Oct. 1 the purchase of the Grace Pacific construction company, which earlier had been announced for a combination of stock and cash valued at $235 million.

“We expect (Grace) to be an important generator of earnings and cash for the company,” Kuriyama said in a conference call.

With its acquisition of Grace Pacific, A&B was “extending and enhancing our community building capabilities to encompass infrastructure work, for which a steady and growing need exists in Hawaii,” Kuriyama said in a written statement. “With Grace, we increase our ability to leverage Hawaii’s improving economy and real estate markets, and materially strengthen our financial profile and flexibility, while also enabling us to initiate a modest quarterly dividend.”

A&B’s agribusiness operating profit for the third quarter was $2.2 million, compared to $9.1 million last year, the company’s third-quarter report stated. The lower profits were “principally due to lower raw sugar margins resulting from one less sugar voyage and lower sugar prices in the third quarter of this year compared with last year.”

“Power and molasses sales margins were also lower in the quarter,” according to the report. The company expects to break even with its agribusiness segment in the second half of this year, generating a loss for the fourth quarter.

In the third quarter, Hawaiian Commercial & Sugar Co. produced 64,000 tons of sugar, down 18.2 percent from the 78,200 tons produced in the third quarter of 2012. The company’s tons of sugar sold fell 50.6 percent from 72,400 tons in 2012 to 35,800 tons this year.

For the first nine months of the year, the picture’s not as ugly. Tons of sugar produced were down slightly at 0.8 percent to 138,600 tons, while tons of sugar sold dropped 33.4 percent to 72,200.

Sugar prices increased modestly in the third quarter, Benjamin said.

A&B remained “hopeful” that sugar prices would continue their upward trend, he said.

* Brian Perry can be reached at bperry@mauinews.com.