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‘Hope and skepticism’: Mahi Pono reaches out to community

Mahi Pono officials making rounds; details about who they are beginning to emerge

Sugar cane tassels from old Hawaiian Commercial & Sugar Co. fields in Spreckelsville wave in the breeze along Hana Highway in this photo taken in December. Mahi Pono, the new owners of the land, are meeting with community groups as it comes up with plans for the 41,000 acres it purchased from Alexander & Baldwin. -- The Maui News / MATTHEW THAYER photo

WAILUKU — When livestock manager Jacob Tavares meets with Mahi Pono principal Ceil Howe III, he can dive into the nitty gritty details of cattle operations — and Howe understands.

“I can sit down with him and talk about cattle types, forage types, irrigation systems,” said Tavares, who handles the livestock for Kulolio Ranch, which Mahi Pono acquired in December. “When your principal partners have that level of vocabulary, for us as farmers and ranchers, that makes the situation a lot more comfortable.”

As the ranch moves under new ownership, Tavares is excited to have the financial backing of a company like Mahi Pono, and the expertise of someone like Howe, a fourth-generation farmer and one of the leading faces of the new company that purchased 41,000 acres of old sugar fields from Alexander & Baldwin last month.

Community members who have gotten to meet the new owners feel a mix of optimism that Mahi Pono could create solid partnerships and help farming flourish, as well as the underlying worry that it could repeat the past mistakes of large-scale agriculture in Hawaii.

“I think all of us want ag to return as the third leg of the economy for food security and also for something that makes Maui no ka oi,” said Lucienne de Naie, conservation chair of the Sierra Club Maui group. “In order to do that . . . I think they need to make the soil right. They need to make it right with the Hawaiian people, and they need to have places where small farmers can actually participate in this new economy.”

Jacob Tavares

Howe also recognized that in order for agriculture to move forward on Maui, both Mahi Pono and local farmers have to thrive.

“Our job is to come here and make our farm successful, but in doing so we have to make all the other farmers successful,” Howe said.

The faces of Mahi Pono

Howe grew up in Stratford, Calif., a small community of about 900 where people have to drive out of town to buy groceries and gas. The Howe family has been in the agricultural business for 90 years, farming up to 65,000 acres throughout Central California at one point.

While the family’s farm was large scale, it was also a close-knit business where some employees stayed with the company for some 40, 50, 70 years, Howe said.

CEIL HOWE III, Mahi Pono principal

“That culture is very similar to the culture here on Maui,” Howe said. “Everybody knows each other. Everybody supports each other. When somebody hurts, the whole family hurts.”

Howe’s family once grew 15,000 acres of cotton but stopped in 2001 because they didn’t want to base all their profits on a government-subsidized crop, he said. Instead, they switched to pistachios and almonds. Over the years, Howe has also raised livestock and farmed corn, walnuts, raisins, cherries, tomatoes, olives and table grapes.

“I’m not an expert at any single one, but I know it’s all built by the foundation, and the keys to the farming are light, water and soil, and a great team,” Howe said.

Howe earned a Bachelor of Science degree in agriculture, agriculture operations and related sciences from California Polytechnic State University. He’s been chief operations officer for his family’s Westlake Farms since 2005, overseeing crops, irrigation systems, marketing, land use, finance and strategic planning.

Howe also has been managing the agricultural portfolio for Pomona Farming, which oversees thousands of acres throughout Northern and Central California. He said Pomona has been researching plans to buy the land on Maui for more than a year now. Together with the Canada-based Public Sector Pension Investment Board, with whom Pomona has purchased farmland before, they formed Mahi Pono.

Kulolio Ranch in Hamakuapoko was part of the Mahi Pono’s purchase of Alexander & Baldwin agricultural holdings on Maui in December. A&B announced in November that the ranch sits on 5,000 acres, some of which are irrigated. The ranch takes calves from local ranches in a partnership with Maui Cattle Co., and raises them to maturity and market weight for the ranches. Kulolio Ranch is paid based on the weight gain. This photo was taken in December 2016. -- The Maui News / MATTHEW THAYER photo

“I’ve gotten to the point where I don’t want to just work to work,” Howe said. “I want to work for a purpose. And this is such a unique purpose and a unique challenge where you can really affect a lot of people. . . . Whereas in California you might produce something and you might ship it halfway across the world. It’s so unique to be so close to the market here.”

Joining Howe is another product of the California agricultural scene, Larry Nixon. On Wednesday, Mahi Pono announced that Nixon would lead the company’s farming operations on Maui as the general manager. A native of Bakersfield, Calif., Nixon earned a Bachelor of Science degree in engineering from Arizona State University and has spent his entire career in agriculture.

In 2013, Nixon moved to Hawaii island and became the business unit manager of MacFarms of Hawaii, which grew 4,000 acres of macadamia nut orchards in Captain Cook. He later returned to the West Coast, where he served as the general manager of the Oregon-based Malin Potato, operations manager for Roll International — now known as The Wonderful Co.  — as well as operations manager for California fruit producer Sun Pacific.

Eventually, though, “the hustle and bustle of California and the snow of Oregon” made him ready to come back to Hawaii and work for Mahi Pono.

“This opportunity for me is a once-in-a-lifetime chance to give back to the state that’s given me so much,” Nixon said. “I know to hear that sounds like fluff, but that’s what I want to do. I want to be a good steward of the land and reintroduce practices and principles that have been practiced here for hundreds of years.”

LARRY NIXON, To lead farming operations

Then there’s Darren Strand, who like Tavares is a former A&B employee moving over to Mahi Pono. Strand, who earned bachelor’s degrees in biology and chemistry from Western Oregon University, has primarily worked in the pineapple industry.

After moving to Oahu in 2001, Strand worked as a field maintenance superintendent for Del Monte Fresh Produce. He later became the director of farm operations for Maui Pineapple Co., which closed in 2009, and then served as president of Hali’imaile Pineapple Co., which farms Maui Gold brand pineapple on 1,000 acres leased from Maui Land & Pineapple in Makawao. In April, A&B hired Strand to be its general manager of diversified agriculture.

Strand said he was involved in the transition to Mahi Pono and got the chance to join the new company. He was frank about his A&B credentials, saying that he’s learned a lot of lessons from “the mistakes that I’ve made or been a part of in the past. . . . Maybe not necessarily my own personal mistakes but the failures of the agricultural industry of the state over the 18 years I’ve been here.”

Strand said he’s “taking the mistakes that we’ve made in the past and cherry-picking the successes that we’ve had, and I think that puts us in a good position to move forward.”

In addition to Strand and Tavares, agronomist Mae Nakahata, former director of agricultural research and crop control for Hawaiian Commercial and Sugar Co., is also joining Mahi Pono.

DARREN STRAND, Former A&B official joining Mahi Pono

“It was one of the deal principles that if we could not at least give an offer to the team they had in place, that the deal was not of that much interest to us,” Howe explained. “Because if we couldn’t have the team and the expertise of the people that are from the island, that was a huge portion of the value for our group.”

Addressing possible concerns over former A&B employees making up Mahi Pono, Tavares said that “we’ve all lived in this community for quite a few years, so we care about keeping the central valley in agriculture as much as our cousins, family, aunties, uncles, neighbors.”

“We felt this obligation as we’ve worked on this the last two years, and this is the opportunity to do it the right way and to have the right capital,” Tavares said. “That’s not an obligation that we take lightly, or anything that we’ve, in this transition, forgotten about. So we all feel very passionate about that.”

Perhaps the most visible face of Mahi Pono thus far has been Shan Tsutsui, the default spokesman, former lieutenant governor and senior vice president of operations.

The homegrown VP is part of the reason why both employees and community groups have expressed optimism about Mahi Pono. A Maui High School graduate, Tsutsui was elected to the state Senate in 2002 and rose to become Senate president in 2010. He was appointed to the lieutenant governor’s post in 2012 and won the post outright two years later.

But in January 2018, Tsutsui resigned, saying he planned to return home to focus on his wife and three daughters and join Strategies 360, a public affairs, communications and research firm. He plans to maintain his position as managing partner there while he works with Mahi Pono

California to Maui

Pomona Farming owns thousands of acres throughout California, but Mahi Pono will be its largest single venture and its first foray outside of the state. Pomona’s projects before Mahi Pono have included “Rodeo,” 7,600 acres of traditional California almond varieties just outside of Oakdale; “Honeybee,” 6,400 acres of largely self-pollinating almond varieties and young organic almonds in California’s Central Valley; “Delta,” 11,000 acres of alfalfa, tomatoes, almonds and onions in the Sacramento-San Joaquin River Delta region; and “Southlands,” 27,000 acres of olives, raisins, almonds and forage crops in the southern end of the Central Valley.

Pomona was formed in February 2017, according to business filings, and while it shares some of the same principals and address as Trinitas Farming in Redwood City, Calif., it’s not a subsidiary of Trinitas, Tsutsui said.

One of the Trinitas principals involved in Mahi Pono is Ryon Paton, who spoke at the Alliance of Maui Community Associations meeting on Tuesday. Paton founded Trinitas Farming with friends Bill Hooper and Kirk Hoiberg around 2007, Paton explained in a 2014 interview with The Modesto Bee. Paton described them as the “classic Silicon Valley startup, except we have nothing to do with technology; we have everything to do with investing and sustaining a company and its values in the agricultural space in the state of California.”

Paton said that Trinitas researched food products that would be “efficient, transportable and cost-effective” to ship throughout the U.S., Europe and India. They settled on almonds, a crop with health benefits and the added bonus of a hull and a shell that would help protect against pests and mildew.

Trinitas started out with 824 acres that expanded into 7,000 acres, part of a wide-scale almond boom east of Oakdale. But as almond operations grew, so did criticism, not only of Trinitas but of the many other almond producers whom residents complained used up precious water.

Trinitas also has been the subject of a lawsuit in which a Modesto land flipper claimed in 2014 that he had been cheated in transactions with Trinitas, according to The Modesto Bee. Trinitas paid a $4 million settlement to the man, Ben Hardister, and was subsequently sued by Virgil Thompson, a witness in the first case who said that Trinitas had reneged on a land easement exchange.

In response to concerns over the almond industry’s use of water, Howe argued that “almonds are not a ‘thirsty’ crop by most measures and almonds alone require a very, very small percentage of California’s water.”

“Half of California’s total water is not touched due to environmental concerns, and 40 percent is used for all agriculture grown/produced in the state,” Howe said.

He touted the versatility of almonds as a source of food for both people and animals, as well as potential mulch for plant beds and fuel for co-generation plants.

“Almost nobody in California (especially the media) understands how much water is required to grow any fruit, grain, dairy or beef product,” Howe said. “That ‘just one almond requires a whole gallon of water’ outrage belies this general ignorance, as it requires 3-plus gallons of water to grow two slices of a single peach, 15 gallons to grow two ounces of rice and nearly 36 gallons to produce just one glass of milk.”

Howe added that Pomona Farming has “been at the forefront of smart irrigation and careful water conservation since our first almond orchard.”

“We invest in our water districts and apply capital to infrastructure improvements that benefit all of the district’s users,” he said. “We never burn byproducts. We provide hydration stations and alternative food for honeybees during bloom. We use solar power to generate much of the energy needed for our farming operations. And we are using new methods to dramatically reduce the dust generated at harvest.”

Along with Pomona, the other half of Mahi Pono is the Public Sector Pension Investment Board, one of Canada’s largest pension investment managers with $158.9 billion (in Canadian dollars) of net assets as of Sept. 30.

Headquartered in Ottawa, PSP Investments manages and invests funds for the pension plans of the federal Public Service, the Canadian Forces, the Royal Canadian Mounted Police and the Reserve Force. Its portfolio stretches across 75 industries in more than 100 countries.

PSP Investments’ Natural Resources Group also has made long-term investments in agriculture and timber. Most recently, in January, it became the majority shareholder in BFB, one of Australia’s largest grain growers. It now has more than a dozen partnerships throughout North America, Australia and Latin America.

Community reaction

Dick Mayer, who moderated the community association alliance meeting with Mahi Pono on Tuesday, said the groups feel a mix of “hope and skepticism.”

“Hope that what we’re saying will manifest itself, that Maui will be able to remain green in Central Maui, that agriculture will flourish, that farmers will have the chance to grow crops,” said Mayer, vice president of the Kula Community Association. “There’s also skepticism that these people are coming from the Mainland, California in particular. The money is coming from Canada, and the Canadians have made no presence here.”

Mayer hoped Mahi Pono’s farm plans could bring two main things — a move away from a reliance on tourism and the planting of crops for local consumption, not just commodity crops like citrus and coffee. But, he said, “they can’t move ahead very rapidly until they know exactly what they’ve got in terms of water.”

De Naie, who also attended the meeting as the president of the Haiku Community Association, said Mahi Pono could show good faith to the community by “coming to some peace” with Native Hawaiian land and water claims, by helping small farmers grow and by helping to heal the watershed.

De Naie wasn’t worried by Mahi Pono’s hiring of former A&B employees. She said she has nothing against them and had expected Mahi Pono to bring over key people from A&B who could help with the transition.

“I would just hope that the folks that worked for A&B in the past would be able to feel like this was a fresh start, and that they wouldn’t have to carry any old ‘for’ or ‘against’ relationships,” De Naie said. “I used to attend hearings where all the A&B employees had red shirts on, and there was the rest of us from the watershed. Sometimes people were glaring at you like, ‘You’re hurting our jobs,’ and some of the people were almost very conflicted because their uncle grew kalo in Wailua Nui and their cousin was there waving a protest sign.”

Albert Perez, the executive director of Maui Tomorrow, said he’s met with Mahi Pono three times and has been encouraged by their willingness to dialogue.

“I think that’s commendable,” Perez said. “In the meantime, of course, because there’s no plan, then people will be suspicious, but I think goes with the territory, especially given the history with the former owners. . . . Mahi Pono needs to be patient with the community sentiment and understand where if they get criticized or asked pointed questions, they need to understand what the experience of the people has been.”

While 27,000 acres of Mahi Pono’s lands are designated as important agricultural lands by the state, Perez suggested that Mahi Pono put all 41,000 acres in an agricultural conservation easement, which he said would help protect against development, give Mahi Pono some tax benefits and provide a show of good faith.

Mahi Pono also could earn support by opening some of the publicly owned roads that A&B closed off in the past, Perez said, pointing out that the Kala-to-Sunny Side-to-Paia Mill roads could serve as a sort of bypass from the airport to Paia and beyond.

He also suggested that Mahi Pono avoid pesticides and find ways to generate fertilizers on their own land to help cut down on expensive, imported fertilizers.

Mahi Pono has offered glimpses into its plans but no concrete timeline as of yet. In an interview with The Maui News on Thursday, Howe said that the first phase will include a community farm, where local growers could access land, water, equipment and services like budgeting and marketing.

Howe and Tsutsui said the crop plan still is evolving because they’re still in talks with the community.

“We don’t want to just say, ‘Hey, we’re doing X, Y and Z,’ cause I think it’s more important that we make sure we fit,” Tsutsui said.

The wait is unsettling for some, especially those who clashed with A&B in the past. Summer Sylva is an attorney with the Native Hawaiian Legal Corp. who represented East Maui residents in the 17-year legal battle over water diversions. Sylva is concerned about Mahi Pono’s water use, particularly with a set of bills going through the state Legislature that would extend A&B’s long-disputed revocable water permits.

“I know very little about Mahi Pono or their plans for A&B’s Central Maui fields, and therein lies the problem,” Sylva said. “No details about the crops they intend to plant, the amount of water those crops will need, alternative water sources (besides East Maui stream flows) available for irrigation, and if (or when) they plan to complete an environmental impact statement evaluating those proposed water uses and their impacts.”

Perez also hopes to see the farm plans but understands that it’s a catch-22. If Mahi Pono came in with a defined plan that wasn’t based on community input, it wouldn’t work. Perez said the right approach is to consult with the community first.

“The irony, of course, is they’re getting criticized by some for not having a plan,” he said. “So I understand the position they’re in with that regard. But at the same time, I would encourage them to share as much as they have, as much as they know, as quickly as possible.”

* Colleen Uechi can be reached at cuechi@mauinews.com.­

Shan Tsutsui