A&B sells all of its farm holdings for $262 million
Alexander & Baldwin, which grew sugar cane on Maui for 150 years and ceased operations in 2016, is leaving agriculture behind on the island, announcing the sale of its 41,000 acres of farm land for $262 million to a farming venture between a California investment group and Canada’s Public Sector Pension Investment Board.
A&B and Mahi Pono, an entity of Pomona Farming LLC and the Canadian investment board, made the announcement of the sale of former Hawaiian Commercial & Sugar Co. lands Thursday.
Under the terms of the agreement that closed Thursday, Mahi Pono purchased the farm lands; Kulolio Ranch, A&B’s grass-fed cattle project, and Central Maui Feedstocks, A&B’s energy crop project, both companies said in news releases Thursday.
The sale also includes Mahi Pono assuming all diversified agricultural leases previously entered into by A&B and for A&B and Mahi Pono to partner in ownership and management of East Maui Irrigation Co.
A&B has come under fire from East Maui taro growers, Native Hawaiian practitioners and conservation groups for diverting water from East Maui streams to irrigate sugar fields and other crops in Upcountry and Central Maui.
Maui Pono said it plans to produce high-quality, nongenetically modified food for local consumption with export potential; provide local partners with resources, such as farming expertise, equipment and farming capital; and create jobs for local residents with job training and educational programs for employees.
The new owners said they have no plans to convert any of the lands to nonagricultural uses.
“With our purchase of this fertile land, we want to help ensure that Maui’s residents can produce agricultural products for future generations,” said Ann Chin, president of Mahi Pono, in a news release Thursday. “We want to expand Maui’s thriving and diversified agriculture industry. As we develop our plans, we will work closely with local stakeholders, including the agricultural community, our neighbors, government officials, civic leaders and the local community.”
The new owners are “committed to sustainable agriculture,” added Chin.
“We will be stewards of the land, and responsible users and protectors of Hawaii’s natural resources and environment,” she said.
A&B said Mahi Pono’s farm plan currently envisions cultivating a broad range of food crops for local consumption and export, including coffee, various fruit and vegetable crops and an expansion of Kulolio Ranch.
A&B President and CEO Chris Benjamin said this sale could be “one of the most important advances for agriculture in Hawaii in many decades.”
“A&B’s commitment, when we made the difficult decision to close our sugar operations, was to team up with qualified farmers and transition these lands to a diversified agriculture model,” said Benjamin. “We acknowledged that this transition would take time, but could support the important goals of food and energy self-sufficiency for Hawaii, preserve productive agricultural lands, and stimulate new economic activity on Maui and in the state.
“In Mahi Pono, we have found a unique partner with proven farming expertise, established marketing channels, strong financial resources, and a long-term perspective. Most importantly, they share our vision of seeing farming flourish across Central Maui for generations to come.”
While it was difficult for A&B to part with its long-held sugar lands, Benjamin said the company believes “the most important thing is that they remain in active agriculture – to help feed our local communities, support our local farmers and provide new economic activity and jobs for Maui and the state.”
Mahi Pono has the expertise and capital “to make diversified agriculture a reality in Central Maui” and could only make investments if it owned the lands, Benjamin said.
“We considered many alternatives and believe this is the best path forward toward keeping these lands in agriculture and sustaining farming on Maui once again,” he said.
All of A&B’s active agricultural personnel will be offered positions with Mahi Pono, the new owners said.
Former Lt. Gov. and Maui state Sen. Shan Tsutsui is a Mahi Pono adviser.
“This agreement significantly increases the potential for a meaningful advancement in food security and a renewed pledge to growing agriculture on Maui, topics that continue to resonate with me since I initiated the ?Aina Pono Hawai?i State Farm-to-School Program in 2015,” he said. “It’s my hope that the fruits of this agreement will have a lasting impact on our keiki (children), the agriculture industry, and the state’s ability to become truly sustainable for many years to come.”
Pomona Farming has experience in farming diverse agricultural crops and managing cattle operations on more than 100,000 acres. The company is focused on agriculture and has a track record of making long-term investments in farming projects, a Mahi Pono news release said.
The Public Sector Pension Investment Board is one of Canada’s largest pension investment managers with $158.9 billion (in Canadian dollars) of net assets as of Sept. 30. It manages a diversified global portfolio composed of investments in public financial markets, private equity, real estate, infrastructure, natural resources and private debt, the Mahi Pono news release said.
Established in 1999, PSP Investments manages net contributions to the pension funds of the federal Public Service, the Canadian Forces, the Royal Canadian Mounted Police and the Reserve Force. Headquartered in Ottawa, PSP Investments has its principal business office in Montreal and offices in New York and London.
PSP Investments’ Natural Resources Group is committed to long-term investments in the agriculture and timber sectors globally. It partners with like-minded operators focused on best practices in health and safety, the environment and sustainability.