Molokai Ranch to cease operating

120 workers axed; gas station, theaters to close

By EDWIN TANJI, City Editor
MAUNALOA, Molokai — Battered by disputes over water and land-use entitlements, Molokai Properties Ltd. told 120 workers Monday that it is shutting down all operations of Molokai Ranch as of April 5.

During meetings held with employees Monday morning, Molokai Properties Chief Executive Officer Peter Nicholas said the workers had been given 60 days notice of termination, but the final day of normal operations will be April 5.

The shutdown affects visitor facilities including the Maunaloa Lodge, the ranch’s Kaupoa Beach Village and the Kaluakoi Golf Course. The Maunaloa gas station, a theater complex and the ranch’s cattle operations also will be shut down, Nicholas said.

In a statement issued to news and government agencies, Nicholas said the company will “mothball” the assets spread across 60,000 acres. He was not available Monday afternoon to respond to questions, including allegations from Molokai residents that the ranch already has begun to sell parcels to a private buyer.

“The decision is a purely business one,” Nicholas said in his press release. “For the past five years, MPL has been working with Molokai community leaders and community members on developing and implementing a master plan for MPL’s property and the future of Molokai.

“Unacceptable delays caused by continued opposition to every aspect of the master plan means we are unable to fund continued normal company operations.”

County and state leaders expressed concern over the impact of the shutdown, not only on ranch workers but on other Molokai businesses that rely on visitors brought in by ranch operations.

“I see this as really impacting not just the company’s employees that are directly affected, but being detrimental to the visitor industry on Molokai and on the cottage industries that are tied to it,” said Council Member Danny Mateo, who holds the Molokai residency seat.

“There’s the rodeo arena, theater, gas station and grocery store — all operated by Molokai Ranch.”

But Mateo also questioned MPL’s motives, noting that the ranch has struggled with community opposition to its plans to develop a high-value, 200-lot rural-residential project on 613 acres overlooking Laau Point.

After a hearing in November, the state Land Use Commission was poised to reject an environmental impact statement prepared by MPL on its master plan for the Laau Point project — but the commission allowed the ranch to withdraw the EIS application.

The ranch’s plans also were battered by decisions affecting its access to water, with the Hawaii Supreme Court in late December rejecting a state water commission decision to allow the ranch to pump as much as 5 million gallons a day from a well near Kualapuu. The decision was on an appeal by the Department of Hawaiian Home Lands, which manages homestead properties at Hoolehua that also rely on the aquifer.

“This is so unfortunate and disappointing,” Mateo said. “With it being final, it seems to be a mean-spirited conclusion to punish a community that isn’t ready to deal with the type of project the company wanted — a project that didn’t fit.

“To subject the community to increased economic hardship is unfortunate. Bringing about economic woe to a community that already has next to zero employment opportunities is terrible.”

In his statement, Nicholas also said the ranch will close access to its property, potentially cutting roads to areas along the coastline at Hale O Lono Harbor and at Laau. The comment drew a strong response from state Sen. J. Kalani English, who noted that Hawaii law recognizes traditional rights for gathering.

“I note that while Molokai Ranch has stated that it will close all access to its property, the company as a landowner has a duty to respect the native gathering rights of Molokai’s Hawaiian population,” he said. “I hope that the company will act responsibly in respecting the rights of the community.”

Mayor Charmaine Tavares said she is concerned about the impact on the community and especially the workers and families who will be affected. She said she was informed that the state’s Workforce Development Division and state unemployment specialists will be going to Molokai to meet with affected workers.

“We’ll also be examining closely existing agreements that the county has in place with the company to ensure that responsibilities are met,” she said.

“Economically, this will be a difficult time for Molokai. Although the company’s decision is very disheartening, this is also an opportunity where the Molokai community can look at options for sustainability that the majority of the people would wholeheartedly support.”

A longtime critic of ranch plans, Walter Ritte Jr., said he saw an opportunity since some segments of the community have been working on the Ho‘i I Ka Pono campaign to buy the ranch lands.

“We are hoping this will turn into an opportunity. We were willing to get back to the table with them, and we have been talking to people about the opportunity to do what we think is right for the island,” he said.

“This is a bad things for the workers, but it wasn’t our doing. We’ve been talking to investors, we cannot name them; we’ve been talking to conservation buyers; we’ve been talking to UPC (Wind), which made a commitment to the community.”

Ritte referred to an announcement in November that UPC Wind, the company that installed the Kaheawa Wind Power facility on Maui, pledged $50 million to the proposal to have the Molokai community buy the ranch lands. At the time, Nicholas insisted the ranch was not for sale.

Colette Machado, the Office of Hawaiian Affairs trustee from Molokai and a supporter of the ranch’s master plan, said it was a disappointment for the workers, but she indicated she still believed the ranch can achieve the plan that would protect lands that are culturally important.

The Community-Based Master Land Use Plan for Molokai Ranch proposed to set aside more than 50,000 acres for preservation, including 26,000 acres to be turned over to a Molokai Land Trust. Another 24,950 acres — 14,390 acres of agricultural land and 10,560 of open space — were to be designated with preservation easements to assure there would be no change in existing land uses.

“This plan came about after countless meetings. It’s a good plan, and Molokai will remain Molokai because the plan protects legacy lands, Native Hawaiian cultural site, access to fishing grounds and saves our lands from further development,” Machado said. “It’s a reasonable plan that reflects the values of the majority of the Molokai community.”

The shutdown will hurt the island, she said.

“This is a sad day, and my heart goes out to the individual families who have supported Molokai Properties for all these years,” she said in a statement from her office.

At the Molokai Community Services Council, which spearheaded the Ho‘i I Ka Pono campaign, Executive Director Karen Holt said she is hopeful the turn of events can lead to a benefit for the community, noting that the council also coordinated the 1998 community planning process that led to the federal designation of the Molokai Enterprise Community.

The Enterprise Community project, which provided $250,000 a year for economic development projects, had included a plan to initiate acquisition of the ranch.

“We can continue this effort. It’s a complicated process, and an expensive one, but we believe it is in the best interest of our island,” Holt said.

It will entail utilizing the development already in place at the Kaluakoi Resort and at Maunaloa, combined with environmental restoration, revitalization of agricultural and fishing operations, and perhaps energy development, she said. But it will take a cooperative community process.

“The answers lie in the community. We are vetting ideas. You can’t push the river. You’ve got to move with it. You can’t say community is what matters and then force your own solution,” she said.

English said there will be a significant impact when a community of roughly 7,500 residents sees the loss of 120 jobs

“However, knowing the Molokai community as I do, I am very confident that the people who call Molokai home will find a way to deal with these issues, and help those who bear the direct burdens of Molokai Ranch’s closure,” he said.

“I do hope, however, that the actions of Molokai Properties Limited are based on the company’s legitimate concerns about the state of the Molokai economy, and not presented as a bargaining chip in their efforts to impose their desire for development on the Molokai community.”

Gov. Linda Lingle said state labor officials will be on Molokai on Thursday to assist ranch workers. The Department of Labor and Industrial Relations’ Rapid Response Team, accompanied by officials from the Department of Human Services, will hold meetings at 10 a.m. and 1 p.m. to provide information on unemployment insurance, job training and placement, and medical benefits. The meetings will take place at the Maunaloa town theater.

Lingle also announced she would convene a Molokai Action Team, comprising state, county and community representatives, to identify additional opportunities to assist the displaced workers while seeking ways to rebuild the island’s work force base.

“It is unfortunate that after working with the community and state and local government on developing its master plan for so long, Molokai Ranch is unable to continue its operations,” she said.

• Edwin Tanji can be reached at citydesk@mauinews.com.