The Maui News: “A&B moving forward with repurposing of sugar cane land”

A&B moving forward with repurposing of sugar cane land

Hawaiian Commercial & Sugar Co. equipment is lined up in front of shuttered Puunene Mill on Thursday afternoon. Alexander & Baldwin shut down sugar operations in December. A&B President and Chief Executive Officer Chris Benjamin told investors Thursday that agricultural diversification on former sugar land is “coming along well” but that there is no expectation of profits from those operations in the near term. — The Maui News / MATTHEW THAYER photo

The Maui News

While agricultural diversification of Alexander & Baldwin’s 36,000 acres of former sugar lands on Maui is “coming along well,” there’s no expectation that the effort will be profitable in the near term, A&B President and Chief Executive Officer Chris Benjamin told investors Thursday.

“In fact, we may continue to have some modest net expenses as we work on repurposing the sugar lands,” he said in a conference call. “But we’re making good progress in discussions with several interested tenants who will help keep these lands in active agriculture.”

He referred to a recent announcement that A&B had entered into a partnership with Oakland, Calif.-based TerViva, a seed oil-producing company to produce biofuel from pongamia trees on 250 acres on Maui.

“If successful, the partnership could expand up to 2,000 acres,” he said.

Benjamin said the company also is working on trials with cattle grazing and other energy crops on Maui.

“Our objective is to deploy as much of our former sugar plantation lands as possible in viable agricultural uses as quickly as possible,” he said.

The company reported $2.4 million of after-tax income from discontinued Hawaiian Commercial & Sugar Co. operations, while the results of the first quarter of 2016 included a $10.8 million after-tax loss related to the sugar plantation’s shutdown, which was completed in December.

A&B announced income of $4.4 million, or 9 cents per diluted share, for the first quarter of 2017. That’s compared with $3.7 million, or 8 cents per diluted share, in the first quarter of 2016.

Results for this year’s first quarter included $3.7 million of after-tax costs ($4.8 million, pretax), which was related to the evaluation of real estate investment trust conversion.

Revenue for the company’s first quarter was $93.2 million, compared with $91.4 million for the same period last year.

“The increase in revenue is attributable to increased development and parcel sales, partially offset by lower materials and construction sales revenue and lower commercial real estate revenue,” A&B said.

A&B’s development of the Ho’okele Shopping Center, a 94,000-square-foot, 8.9-acre Safeway-anchored retail center in Kahului, was mentioned along with the La Hala Shops and Pearl Highlands Center on Oahu as part of “our strategic objective of increasing recurring earnings from our commercial portfolio,” Benjamin said.

In its commercial real estate segment, the company reported selling the 16,600-square-foot Maui Clinic Building for $3.4 million in January. The company also closed a sale of a Maui Business Park property for $2.4 million, and it sold an urban-zoned vacant property of 0.8 acre for $1.6 million.

A&B reported there were two Maui industrial tenants (both in the P&L Building on Papa Place) who chose not to renew their leases.

The company’s commercial properties increased operating profit 9.2 percent to $14.3 million in the year’s first quarter, compared with $13.1 million in last year’s first quarter. Occupancy of A&B’s commercial properties was “stable” at 94 percent, the company said.

April 19, 2017March 19, 2018

The Maui News: “The Last Harvest-The Final Chapter in the Story of Sugar on Maui”

The Last Harvest: The Final Chapter in the Story of Sugar on Maui

Alexander & Baldwin Inc. sounded the death knell of sugar on Maui and in Hawaii on Jan. 6, 2016, when it announced the end of operations at Hawaiian Commercial & Sugar Co. after the 2016 harvest.

The announcement was abrupt and caught many off guard, but was not totally unexpected. A&B said that its agribusiness sector, which was mostly HC&S, faced $30 million in losses in 2015 and “significant losses” going forward, which corporate officials called unsustainable.

The losses stemmed from lower yields due to wet weather and a significant increase in the world sugar supply, which depressed prices. HC&S also faced headwinds from those opposing cane burning and the drawing of water from streams in East Maui and the West Maui Mountains.

It was difficult news to hear for the 675 workers, all but 15 of whom would lose their jobs at the end of the harvest in December. Workers were laid off as the company completed its series of “lasts” — from harvesting to the shipping of the sugar out of Kahului Harbor. Workers and retirees marked the arrival of the last Tournahauler filled with cane at Puunene Mill on Dec. 12.

The fire went out at the mill four days later and the last workers were laid off about a week after that.

Hawaiian Commercial & Sugar Co. workers gather for a group photo at Puunene Mill on March 1, the day the final harvest of sugar cane began. The Maui News / MATTHEW THAYER photo

A&B worked with federal, state, county and nonprofit officials to help the workers find new jobs, new lives. As of late December, A&B reported 200 of the workers had found new jobs, 99 had retired and 13 had relocated off-island.

An auction was held last week to sell off the equipment of HC&S.

As the sugar plantation fades into history, A&B looks for uses of the 36,000 acres of former sugar cane fields. Diversified agriculture, biocrops and irrigated pastures for cattle are among the options being mulled by company officials. Members of the public have been vocal in offering their thoughts on uses for the fallow fields.

Old-timers will say that there was a time when “sugar was king.” There were plantations all over the island from Hana to Lahaina, and ruins of those old mills still can be found in Kipahulu, Ulupalakua and Haiku. In the 1960s, three sugar plantations dominated the Maui landscape — Wailuku Sugar, Pioneer Mill in Lahaina and HC&S. Wailuku Sugar was the first to shut down in the late 1980s; all that’s left of that business is Wailuku Water Co. Pioneer Mill closed in 1999; the smokestack near the intersection of Lahainaluna Road and Honoapiilani Highway is a reminder of the company’s 139 years of sugar operations.

The plantations diverted water from wet areas through tunnels, siphons and ditches to feed the thirsty sugar crops. Those diversions currently are being disputed by taro farmers, Native Hawaiian practitioners and others who say that the plantations and their predecessors have unfairly removed water from the streams for commercial purposes outside of their regions.

The plantations literally changed the face of the islands, bringing in workers from China, Japan, Portugal and the Philippines. Those cultures blended for generations to create the multicultural mix of Hawaii’s population today.

Old-timers remember their days in the dusty, rustic plantation camps with fond nostalgia, but it was a difficult and harsh life. Workers toiled in the fields for long hours and minimal pay. The years have washed away the rough edges, the conflict over union organizing, better working conditions and higher wages and the social and economic hierarchy.

HC&S was born in 1870 when Samuel Thomas Alexander and Henry Perrine Baldwin planted their crop on the newly established Alexander and Baldwin Plantation in Makawao.

Before sugar on Maui disappeared into history, The Maui News embarked on a project to document “The Last Harvest” for future generations. The reports in words and photos throughout 2016 were intended to detail the process of growing and producing sugar at HC&S, whose large-scale and efficient operations were key attributes to its longevity and being the last sugar plantation in Hawaii.

This publication is a compilation of all of those stories and a few others that document “The Last Harvest.”

The Maui News thanks A&B and Tran Chinery for setting up the visits and HC&S and its workers for opening the doors to the mill and letting a reporter drive a Tournahauler in the fields.

It was a last harvest to remember.

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

February 8, 2017March 20, 2018

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.