Interview with Peter Martin: Developer talks about his start, challenges building affordable homes

His opponents outline issues with him; developer’s West Maui projects up for vote at council Friday

Developer Peter Martin (right) reviews a map of his latest proposed projects in West Maui alongside Hope Builders project manager Kyle Ginoza during an interview last week. The Maui News / COLLEEN UECHI photos

Peter Martin’s first fortune on Maui wasn’t in land but in puka shells.

When he first moved to Maui in the 1970s, he and his then-wife, Debbie, would go to the beach, scoop sand into a small screened box and sift through it until they found the puka shells.

“You’d pick the shells out, put ’em in your mouth, and when you got a mouthful, you’d spit ’em in the sock and you’d put the sock in your (shorts) like that in the hook, and then you’d wait till you got another mouthful,” Martin said.

At night they’d sort out the shells and poke any pieces of sand out with an ice pick. The next morning, Debbie would go to the beach in front of the Sheraton and string them together.

“In ’77 I think we netted around $70,000 in puka shells,” Peter Martin said.

Peter Martin went from teaching math and physics at Baldwin and Maui High schools to becoming one of the most high-profile and controversial developers on Maui.

Over the years, the former Baldwin and Maui high schools teacher went from teaching math and physics, waiting tables and sifting for shells to investing in massive parcels of land and becoming one of the biggest and most controversial developers on Maui.

In the process, the now 72-year-old developer has drawn the ire of community members who’ve battled him over kuleana rights, land management practices and the rise of gentlemen estates — all longtime complaints that resurfaced last month when Martin’s most recent projects came before the Maui County Council’s Affordable Housing Committee.

“I knew his name from when I was in high school as being the guy who bought out Pioneer Mill land,” said Tiare Lawrence, a Lahainaluna graduate whose family has gone to court with Martin over land rights. “I knew his name as being the evil developer. Ask a majority of Hawaiians on the west side, if you say ‘Peter Martin,’ you’re not going to hear anything nice about him.”

From Physics to Real Estate

Martin first came to Maui in June 1971 at the suggestion of his mother.

“She said, ‘Oh, we can get a job over here where rent’s $15 a month and you pick pineapple,’ “ Martin recalled. “I go, ‘Humph, college degree, picking pineapple.’ So I came over and . . . it was very nice, it was beautiful. I just fell in love with it.”

Martin started out picking pineapple at the Honolua Plantation, eventually moving on to truck driver and then to luna (supervisor). After the summer was over, he went back to California to get his then-girlfriend, Debbie, and they moved to Maui.

In January 1972, Martin landed a job as a math and physics teacher at Baldwin High School.

“You couldn’t get a job. All the baby boomers were teachers, so there’s huge excess of teachers,” said Martin, a San Diego native who graduated from San Diego State University with a degree in math and physics. “But (for) math-physics, there wasn’t. So I got that.”

In September 1972 he moved over to Maui High, where he would stay until 1977. For a few of those years, he also waited tables at night. Debbie was a waitress at Whaler’s Village before she went into the puka shell business. They sold the shells and crocheted swimming tops and started their own shop before Debbie said, “Now can I get pregnant?” Peter recalled.

“I looked at how much savings we had, and I went, ‘OK, you can make it till you can go back to work.’ And she never had to go back to work.”

Slowly, Martin began buying and selling. He spent $2,000 on his first investment — a minuscule share in a piece of property at Makena Beach in the early 1970s.

“It was just supposed to be a great investment, but it wasn’t,” Martin said. “I got money back, but . . . if you left your money in the bank at 3 percent, it would’ve been better.”

His second investment, a property in Maui Meadows that he put $2,500 down on, did much better. He built a small ohana and rented it out for $325 a month, eventually selling it for $118,000 as Wailea property values climbed.

“That money and the puka shell money and other always saving allowed me to get started,” Martin said. “But the biggest decision I made was I started studying economics.”

Early on his career, Martin had enjoyed reading The Wall Street Journal, and around 1977, he started seriously studying free-market economics, going to conferences on hard money and learning about Austrian economics.

“Over time I went, wow, you better be careful of the government cause they’re stealing your money,” Martin said. “So the more I started studying, you had to figure out a way of protecting your savings.”

In 1980, Martin sold the couple’s home on Ainakea Road in Lahaina — their first West Maui investment in 1974 — as well as all other investments and went the all-cash route in anticipation of the coming crash.

Martin’s major land acquisitions started in the 1990s, when he and his friend Jim Riley founded West Maui Homes and built some houses in Kaanapali Golf Estates. In 1996, they established West Maui Land Co., which would serve as something of an umbrella for the land purchases they’d make in the coming years. The company was two-thirds Martin, who served as vice president, and one-third Riley, who served as president.

As sugar operations in Lahaina began winding to a close, Martin began focusing on Amfac/JMB, which ran Pioneer Mill. One evening in 1996, Martin drove out to Launiupoko and camped alone on the hills. He awoke the next morning convinced that he could turn it into a community of local families.

In 1997, he joined up with some investors and bought 458 acres in Launiupoko from Amfac for $2.6 million.

“Nobody wanted that,” said Martin, who was the majority buyer at about 70 percent. “Rocky. Power lines. . . . My architect begged me not to touch the place. He just said, ‘Nobody wants to get there.’ But I knew local people wanted to get there. I didn’t think we’d ever see the type of buyers we have now.”

Shortly afterward, Martin again teamed up with investors to purchase 700 acres in Olowalu for $9.1 million, then 1,600 acres in Kahoma for $3.6 million, 220 to 240 acres in Kauaula for $2.6 million and 5,000 acres in Makila for $15 million. He also bought land in Haiku from Amfac and various families.

“I didn’t have money, so I had to find people that believed in me and believed in West Maui Land,” said Martin, who recalled being a 51 percent buyer in Kauaula, 43 percent in Kahoma, 31 percent in Makila and a smaller percentage in Olowalu that later grew to 40 percent.

The timing was fortuitous for Martin. In 1998, the county passed a sliding-scale agriculture bill, which put a limit on agricultural subdivisions but “grandfathered me because I was almost through,” Martin said. Before the bill, ag land could be subdivided into as many 2-acre lots as a landowner wanted. (For example, 100 acres could be subdivided into 50, 2-acre lots.) But the new law set a cap of 14, 2-acre lots, no matter the overall lot size.

“What it did was create a huge shortage of 2-acre lots, and we had ’em still,” Martin said.

Martin sold 37 of the original 50 Launiupoko lots. The 4-acre lots sold for $325,000; the 2-acre lots for $210,000 with a discount. But as the properties ran up in value over the years, some started selling for $1 million or more.

“Many of the people I sold to, like the people born and raised here, they still got their lot,” Martin said. “But some of the other people flipped ’em and stuff. And then the next thing that happened was people started building these mansions up there and swimming pools. I went, ‘Ho man, who would’ve guessed?’ I had no idea.”

Martin said he didn’t expect millionaires to snap up property in Launiupoko.

“They always wanted to be in Kapalua or Kaanapali,” he said. “This didn’t seem like the real rich would want to be here. . . . We had no CC&Rs. You could have a pig farm next to you. And I just didn’t think rich people would want that.”

Community Clashes

The purchases of those lands and the proliferation of “gentlemen estates” brought controversy with the residents.

Kauaula Valley resident Ke’eaumoku Kapu said his clashes with Martin and West Maui Land Co. go back to the purchase of Pioneer Mill land, which Kapu and others in the valley had long considered kuleana lands on lease to the mill.

In 2002, Makila Land Co. (which was managed by West Maui Land and Pacific Rim until Martin recently bought them out) sought quiet title to a 3.4-acre kuleana parcel that Kapu and his family had laid claim to. The 2nd Circuit Court initially granted summary judgment on Makila Land Co.’s claim. But Kapu appealed, and in 2007, the Intermediate Court of Appeals reversed the decision and sent the case back for trial. In June 2017, a 2nd Circuit Court jury decided in favor of the Kapu family.

Martin is appealing the ruling.

“This whole issue from the beginning with the relationship between me and West Maui Land Co. was always about title, and how they’ve all of a sudden treated a lot of the families up there as secondary to everybody else,” Kapu said. “The new buyers that was coming in had more rights than any of the kuleanas.”

Martin’s legal battles with kuleana families are a large part of what’s built up resentment toward him.

“There’s just a lot of bad feelings from the families, particularly in west side, because we’ve been dragged through the courts for years,” Lawrence said. “They talk about wanting to give affordable housing, then why are you displacing native people off their land? Kuleana lots are typically very small parcels of land.”

Lawrence said her family has kuleana land in Makila and Kauaula, and that they went to court over it years ago. Many families don’t have the money to take on a big company like West Maui Land and have lost their land in the process. She said the displacement of native families began with Pioneer Mill and Alexander & Baldwin and that “Peter Martin is just continuing that trend.”

Meanwhile, Kauaula residents have watched with frustration as new buyers moved into nearby agricultural lots with swimming pools and limited farming that took water away from their valley.

“Seeing Launiupoko, how lush those developments are, with everything that’s growing over there, and you look at our valley, we struggling over there,” Kapu said.

Families like the Palakikos and the Kapus get a certain amount of water through a 2003 land use settlement (800,000 gallons a day for the Palakikos, 100,000 gpd for the Kapus), and Kapu said that while it sounds like a lot, much of that water goes into the taro patch and back into Kauaula Stream. However, Kauaula families have often struggled with West Maui Land Co. and its water companies over outages that Kapu said occur at least once a month, impacting crops and day-to-day activities like bathing.

Water is being restored to Kauaula and Launiupoko streams due to a March 2018 state Commission on Water Resource Management ruling on stream flows, but the Kauaula residents fear the proposed developments will impact their water resources even more. And, some Launiupoko residents expressed the same concern when Martin’s most recent projects came before the council.

“All of a sudden they singing our song,” Kapu said. “And now he’s calling them ‘NIMBYs.’ “

Martin said the people who are opposing his projects aren’t the original buyers he sold to but rather newcomers to the neighborhood.

“A lot of it is that they’re wealthier newcomers that just don’t want and are almost afraid of the people that might live there . . . or don’t want the crowds,” he said.

Martin disputed the complaints that kalo farmers are often without water in the valley.

“Now, occasionally something weird can happen, like the dam got plugged up and it went into the intake,” Martin said. “Something can happen for a day or something, but day in, day out, he (Palakikos) gets the water first before anybody.”

But Kapu said the problem is that it shouldn’t be happening at all.

When asked why he has taken kuleana families to court over small parcels of land, Martin said that he challenges anyone who tries to fake ownership and that “if anybody really has an interest in any land, we address it” through the legal system.

“If somebody like starts to build something on your property, you try to take action,” Martin said. “For me, I inherited some of these things that people had said, ‘Oh, we’re just going up to my parents’ house or the grave site.’ Next (thing you know) they’re living up there and they go, ‘we own it,’ and we go, ‘well, you don’t.’ “

Kyle Ginoza, project manager for Hope Builders, which is owned by Martin, said that “a lot of it is the liability side too.”

“They’re building these unpermitted structures and if something happens . . . he’s on the title as the land owner,” Ginoza said.

But Lance Collins, who’s represented Kapu in the Makila case, said that Pioneer Mill did the very things that Martin accuses residents of — making false claims to land. Collins said that plantations have a long history of pushing people off of their land.

“If I steal your bike, ride it around for 10 years and then sell it at rock-bottom price to someone else, that person is basically buying my stealing of the bike,” Collins said. “And so if you do that, that’s what you get. . . . If somebody got it and denied that was your bike, then they basically are picking up that fight.”

Project Opposition

Residents have not only taken Martin to task over land rights, but over the housing projects that he or his partners have tried to put on some of those lands.

The Olowalu Town project was one of the biggest and drew some of the stiffest opposition. The Bill Frampton and David Ward-led development proposed 1,500 homes — including 750 affordables — along with stores, schools, parks and a small boutique inn on 636 acres of agricultural land partly owned by Martin’s Olowalu Elua Associates (other members included Riley and Glenn Tremble) and Ward’s Olowalu Ekolu LLC.

In 2015, the state Land Use Commission rejected the project’s nearly 4,000-page environmental impact statement, saying that it failed to answer questions from commissioners and residents about potential impacts on traffic, cultural resources and archaeological sites.

Then in 2017, a group of more than 200 Haiku residents known as Na Hinano O Pauwela sued the county and Kauhikoa Land LLC — owned by Martin and Ward — which had proposed building Pauwela Homes as a 100 percent workforce housing project of 33 single-family homes mauka of Haiku Elementary School and the Haiku Community Center.

Collins, who represented Na Hinano, said that residents were concerned about the subdivision erasing old government roads, which are public lands, as well as putting single-family homes on agricultural lands. Both sides reached a settlement that included modifications to the project’s layout and having the county look into speed bumps and stop signs for the subdivision, a process that’s currently ongoing, Collins said.

Then, mostly recently, there are the Launiupoko projects – Makila Rural East and Polanui Gardens. Hope Builders, which is owned by Martin and his current wife, Maggie, is proposing Makila Rural East, which would create 46 affordable single-family lots and 45 market-priced agricultural lots, as well as a neighborhood store and park. Kipa Centennial, which is owned by Martin and his former wife, Debbie, is proposing Polanui, which would create 50 affordable single-family lots and 16 market-priced agricultural lots, also with a community park, garden and agricultural use easement.

The projects also were seeking district boundary amendments from agricultural to urban for the workforce housing lots.

After hearing from testifiers about traffic, water and fire hazard concerns, the council’s Affordable Housing Committee voted against the projects, which now move on to the full council for a vote on Friday.

Many have criticized Martin for segmenting a larger parcel of land into smaller projects after previous denials in order to push through the Makila Rural East and Polanui Gardens projects. Martin said that’s not the reason behind it. He said he only did 50 affordable lots because any more would prompt a sewage treatment plant.

“If I did 51, I’d have to do a sewage treatment plant,” he said. “That’s no question that’s exactly why I did it.”

Martin said if he’d had to do a treatment plant, he’d have to do an EIS, “and that’s where the lawsuits come in.”

“That’s where they sue you forever and it kills the project,” he said.

Martin believes these are the projects that align best with his original vision of Launiupoko — putting local families on open land with freedom of space and stunning views of the ocean.

“It’ll really make a nice neighborhood, a neighborhood of all locals,” he said. “That’s what we originally planned. Now it’s going back to all of that.”

He said that with Polanui, “the first thing we did was max out the affordables,” and then maxed out the rest of the land with 1-acre agricultural lots.

But Collins said he thinks the reason the community often clashes with Martin over housing projects is that “they don’t always comport with the community plan.” He said that Martin’s philosophy of people needing to be free and do whatever they want with private property conflicts with the community-oriented approach to development that people want to see.

“Our ideas of community planning and land use regulation involves the community being involved in deciding what the community looks like, and that conflicts with . . . doing whatever you want on your private property,” Collins said.

But Martin said that he tried to get his projects in line with the community planning process, recalling how they got the Makila and Polanui parcels within the rural growth boundary of the Maui Island Plan, which came out in 2012. But now, as the 1996 West Maui Community Plan undergoes an update, community members are saying they don’t want to see growth in this area, county planning staff told council members last month.

“The community plan is supposed to refine it, not wipe it out,” Martin said. “This is all government gobbledygook. A lot of these people, their end result . . . they just don’t want anybody else here.”

Albert Perez, executive director of Maui Tomorrow, said that those plans are supposed to be in sync, but pointed out that the Maui Island Plan was created long after the West Maui Community Plan.

“I can understand how that can be frustrating for him, but the process is not complete just because the Maui Island Plan designates something as an urban growth area,” Perez said. “The process isn’t complete until the community plan is updated to take into account the Maui Island Plan. Going forward, we won’t have a situation where community plans don’t address the Maui Island Plan. The West Maui plan is the first one.”

Perez thinks developers need to go for projects in areas consistent with the community plan, which would “be speeding up the process but also respecting and honoring the work that was put in by those CPAC members.”

In Martin’s opinion, the only way to do housing projects now is to go through the fast-track process, even though “I don’t know how you can call it fast track.” He said he bought the land for his current projects for $10 million in 2016, and that it’s taken three years and $700,000 to get to a point where the plans can come before the council. Factor in a few more years of site work and house building, and it could take seven years to get a project through the fast-track process.

“It still takes three years to get here, but the other way it took $4 million and 12 years to get a no,” he said, referring to the Olowalu Town project that went through the conventional EIS process and was denied. “This way if I get a no it’s much more palatable.”

Martin said that lawmakers should “just say yes when it comes to” fast-track projects. When asked what they should do if there are serious issues with the projects, Martin said that “if it’s not a health and safety issue,” it shouldn’t derail the project.

Martin and Ginoza said that projects are often times sunk by issues that people continue to repeat until it’s taken as fact, even though developers put in hundreds of thousands of dollars to get technical professionals to show that, for example, a project has an adequate supply of water.

“From a scientific perspective, there’s studies showing that it’s adequate, and yet you go in front of the council and all of a sudden just some random person or a few random people (are) saying there’s not enough water,” Ginoza said. “That’s kind of the frustration, is what background are people coming out with these statements on when we’ve tried to do our due diligence?”

But Collins countered that people have long been suspicious of project consultations because they tend to support the developments they’re being paid to study.

“That’s not something personal to him,” Collins said. “That’s something that all developments are affected by.”

And until government changes the process where the people who do the expert analysis are separate from the developers, people will continue to question the conclusions of project consultants, Collins said.

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