Just last week we were surmising that maybe the huge project of remaking an entire Hawaiian island in his own image was a precipitating factor in Larry Ellison's decision to step down from the CEO role at Oracle. Now the New York Times has come out with a lengthy investigative piece about just what the hell Ellison and his shadowy team have been up to on the small but tight-knit island of Lanai, where the billionaire now owns all but a few acres and almost every resident is either paying rent to him, or is now somehow employed by him.
Ellison bought 97 percent of Lanai, as many will remember, for approximately $300 million in 2012 from fellow billionaire David Murdock, who bought the Dole pineapple company in the 80's and with it all of these 87,000 acres. As the Times notes, Ellison's been quoted as saying that the overall project of Lanai is going to be a full-scale, "really cool 21st-century engineering project" to build "the first economically viable, 100 percent green community." But what he starts with is an economically precarious place that's home to two Four Seasons resorts and 3,200 residents, many of them from families of mixed heritages who are mostly descended from immigrant pineapple-farm workers who moved to the island after Dole purchased it in 1922.
It was that other billionaire, Murdock, who built the two resorts and who ended up with a bit of a money pit on his hands as the majority landowner of Lanai. Many residents, having felt slighted by Murdock in the last decade as Murdock began to invest less of his money there, were grateful to hear about Ellison's plans. But the last two years of unfolding efforts have not been without pitfalls and red flags, leaving a lot of people to wonder what's going to happen if Ellison gives up on this project like his predecessor did, or if he just happens to die one of these days and his people no longer see this as a good investment. He has become, uncomfortably, ersatz ruler of a small island nation whose entire tourist economy now depends on his stewardship.
Nothing too sinister has happened so far, but there was a dust-up withe the local government recently, which spurred, just two weeks ago, the stoppage of construction on a planned desalination plant by Ellison's holding company Pulama, which is a key to the future water needs of Lanai. The local planning commission, it seems, has grown tired of being told what to do.
The planned desalination plant, already in its first phase of construction near the Four Seasons at Manele Bay, was a linchpin in Ellison’s vision; by converting up to 10 million gallons of salinated groundwater into fresh water a day, it would make more development and population growth possible. Earlier this year, the company went to the Lanai Planning Commission for a 30-year special-use permit to operate the plant. (The commission, made up of nine residents, is the one body of truly local government on Lanai...) But after months of hearings, the Planning Commission rejected Pulama request and decided to issue a permit for 15 years instead. The move may sound insignificant, but as Robin Kaye, a longtime resident ... pointed out, “This is the first time in two years, in a formal way, that any part of the community has said no to something Pulama has asked.” ... [As another local put it,] “The local people want a say. And this was their chance. It was a display of power. Psychologically, it makes all kinds of sense to me.”
The insistence on the 15-year agreement caused Pulama, it seems, to suddenly stop construction on the plant on September 12 the second time in recent months that a project had been mysteriously, quietly abandoned, after reconstruction of a golf course suddenly halted this summer, and its designer sent home to the mainland until "2015 or 2016." What's been left is an unusable, overgrown course that smells "like a sewer" for all who live near it, because of fish ponds that were left to die and rot.
Ellison himself, and all of his close staff, refused to cooperate with the article or give any direct quotes. But, regardless, it's a fascinating read about a little-known corner of the world that now has another billionaire and his whims to cope with. And maybe one day soon Ellison will actually come forward and talk to these people himself (he's made no public appearances on Lanai, which is just weird) and tell them when his "really cool 21st-century engineering project" might be finished, or what it will even entail.