Announced during a news conference Wednesday afternoon, the deal would return diverted surface water to Na Wai Eha streams, remove private ownership and improve the efficiency and capacity of the county’s public water system, according to a fact sheet.

The announcement comes with the imminent closure of Hawaiian Commercial & Sugar Co., which irrigated its 36,000 acres of sugar cane in Central Maui with water from East Maui streams and Na Wai Eha, the four great streams of Central Maui — the Wailuku, Waihee, Waikapu and Waiehu streams. The plantation is continuing a transition to diversified agriculture, including cattle grazing.

Wailuku Water Co. President Avery Chumbley emphasized that the agreement is a “working document” that would need to be finalized before being submitted to the Maui County Council.

“It’s not a signed agreement,” he said.

Mayor Alan Arakawa discusses a proposal for Maui County to purchase 8,764 acres of West Maui Mountain watershed lands and Wailuku Water Co.’s ditch water delivery system for $9.5 million during a news conference Wednesday. County of Maui / LOIS WHITNEY photo

When asked how the $9.5 million for the watershed and ditch infrastructure was arrived at, Chumbley said it was “mutually agreed on.”

The price was based on “what we believe to be the comparable value of land on a per-acre basis,” he said, with the added value of infrastructure for the water conveyance system and easements.

“I am excited about the opportunity for it to finally be held in public hands,” he said.

There could be greater public access, opportunities for expanded parks, areas for hiking and for nature activities, Chumbley said.

And, “the watershed is absolutely critical to the underlying aquifers” in Central Maui, he said.

The agreement would ensure public access to groundwater and provide a supply of potable water to the county Department of Water Supply, he said.

As a political subdivision, Maui County is not subject to water utility regulation by the Hawaii Public Utilities Commission, as is a private company, such as Wailuku Water, he said.

The county does not need to seek a certificate of necessity from the PUC or file a docket for a water rate case, he said. To charge for water use, the county would need to pass an ordinance for the delivery of water for a fee, Chumbley said.

Mayor Alan Arakawa, who revived interest in the county watershed acquisition proposal first floated 11 years ago, said his administration transmitted a budget amendment to council members, seeking their approval for funding to appraise property and infrastructure owned by Wailuku Water.

“If this purchase goes through, I believe it will not just be a win for native water rights but also make our Maui County water system the best in the state,” Arakawa said.

Former Earthjustice attorney Kapua Sproat said the agreement has the potential to return West Maui Mountains streams to a traditional Native Hawaiian resource management with mauka-to-makai stream flows.

“I think we’re at a historical juncture for Maui’s water future, and this has the potential and promise of transitioning us from the plantation system of private ownership to a 21st century ahupuaa-based resource management,” she said.

“For more than 100 years, Wailuku Water Co., HC&S and other companies have been treating Na Wai Eha and other water systems throughout Maui as their private property,” she said, adding that putting stream water resources under county control provides the opportunity to manage them as a traditional mountain-to-ocean ahupuaa land division.

“We must still be mindful that this is a first step,” Sproat said. “This is an offer from Wailuku Water Co. We have a long way to go. We’re going to have to work with the council and many other folks to make this dream a reality.”

The “devil’s in the details,” said Hokuao Pellegrino, vice president of Hui o Na Wai Eha, a Native Hawaiian group working to restore water to West Maui Mountains streams. But he called the agreement a “step forward, a couple of steps forward.”

The task ahead is to work with the mayor and the County Council to work out the details, he said.

The hui remains a participant in a contested case proceeding before the state Commission on Water Resource Management to determine stream-flow standards in the wake of the HC&S closure. Parties have until Feb. 3 to file their proposed findings of fact, conclusions of law and decision and order to hearings officer Lawrence Miike.

The commission also is reviewing permit applications from people claiming rights to water from Na Wai Eha streams.

There was no immediate comment Wednesday from council Chairman Mike White, but Council Member Mike Victorino, former chairman and current vice chairman of the council’s Water Resources Committee, said the community has been divided over water issues a long time.

“But this proposal is something we can hopefully all finally agree upon,” he said.

Council Member-elect Alika Atay, who will succeed Victorino in the council’s Wailuku-Waihee-Waikapu residency seat, said he was “ecstatic” about the water agreement.

“I’m very hopeful,” he said. “We are truly serving the public by doing this by returning this public resource to the community. I look forward to reviewing the details with the rest of the council.”

Among those details is a part of the tentative agreement that refers to a sale of 1,100 acres called “Iao South” to an unnamed “another party.”

Arakawa and Chumbley would not identify the unnamed party for the record Wednesday.

But discussion overheard during Wednesday’s news conference indicated that the buyers are developer Mike Atherton, owner of the Maui Tropical Plantation, and Duane Ting, president of the Flyin Hawaiian Zipline, who won a small businessperson of the year award in 2010.

Atherton referred to a confidentiality agreement in refusing to confirm or deny that he was a party to the purchase of 1,100 acres from Wailuku Water. He is developing the 1,600-acre Waikapu Country Town project, and he said Wednesday that a 1,100-acre agricultural project is a key part of the development.

He said he supports the mayor’s proposal for the county to purchase Wailuku Water’s watershed lands and its ditch system.

“I think it’s the right thing to do,” he said, adding that his project needs surface water for its agricultural component.

The country town project’s environmental impact statement is complete, Atherton said, and the proposed development will go before the Maui Planning Commission and County Council next year.

Chumbley said he was “not at liberty to say” if Atherton was one of the “Iao South” buyers.

That land deal was “not a closed transaction,” he said. It was a private land sale agreement currently in escrow.

Wailuku Water Co. owns about 13,200 acres of West Maui Mountains forest reserve watershed lands.

If both land deals are finalized, the company would be dissolved, Chumbley said. Wailuku Water is the descendant of Wailuku Sugar and Wailuku Agribusiness Co., which produced sugar, macadamia nuts and pineapple over a span of almost 140 years.

Currently, the county pays Wailuku Water $250,000 a year for 3 million gallons of water daily.

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