Imagine owning an Island! Imagine owning the sixth-largest island out of the eight major ones in Hawaii. Well, get in line. This island had numerous owners before the arrival of Western explorers. Before then Native Hawaiians inhabited it. In 1861 the King of Hawaii, King Kamehameha I, sold it to a bunch of Americans. Who bought it on behalf of the Mormon Church. Wow, that is a lot of church tithing collections.
In 1861 Walter Gibson, arrives to reorganize a Mormon colony and buys one chief-owned plot for the church. And by the time Brigham Young realizes what he has done. Without the church’s knowledge, he was buying up these lands and putting it in his own name. This was not going to stand and years later he was excommunicated. Which set the resale of the island in motion for decades to come. In 1909, one of the wealthiest businessmen in Hawaii, Charles Gay, bought the island for just $1. At least, that is what the New York Times reported back in 1914. It was a sweet deal, but the shape of the island was not good.
Supporters of the Lanai exchange believed that stewardship of the land meant finding a way to make as much money from it as possible. In their eyes, one person with sole ownership would be best for the island. Especially if that person was rich. Charles Gay was a cattle rancher on Lanai already when he purchased the island. He knew the value of the land.
That idea had the backing of former U.S. President Theodore Roosevelt, who expressed his support for the exchange in a letter he wrote. “As regards to the small islands,” wrote the president, “we must try to put them under private ownership and under private ownership of some man rich enough to take measures that will prevent their being rendered absolutely uninhabitable.”
But Gay only owned the island for less than a single day. William G. Irwin owned the Sugar plantation on the other side of the island. On April 10, 1907, the Lanai exchange was finalized. Gay took the land and then surprisingly mortgaged the island of Lanai back to Irwin the very same day, for close to $200,000 a year. Charles Gay was the front man for William G. Irwin, Irwin was one of the largest players in the islands’ sugar industry. His company controlled nearly one-third of Hawaii’s sugar trade. He had been interested in buying Lanai for years, but he needed a way to get around the limitations on land acquisition set by the Organic Act. The possibility of an exchange offered a ray of hope, and to make the deal look more legitimate, Irwin got a frontman, Charles Gay.
Two years later, Gay defaulted on the terms of his mortgage with Irwin. He conveyed the lands to Irwin officially, as recorded on the 1909 conveyance document. Just 13 years later, it was resold for over a million dollars to James Dole, the president of Hawaiian Pineapple Company. All of Lanai has been owned by a single person or company for more than one hundred years.
The Dole family (the Hawaiian Pineapple Company, later known as Dole Food Company) started the world’s largest pineapple plantation on the island. The island took on the name “Pineapple Island” for a long time. Until bigger money came in and bought them out. A large business conglomerate that owned part of Dole Food Company, Castle & Cooke acquired the operation on Lanai. A couple of years later it was sold again. Dole Food owner David Murdock, now 101 years old, sold the tiny Hawaii Island of Lanai to its current owner, Larry Ellison. The Oracle owner paid $300 million a little over a decade ago. Murdock did so with one provision that he could keep a 1-acre parcel where he had built an oceanfront vacation home. To live out the remainder of his life in paradise on the island that once hosted one of the world’s largest pineapple plantations.
In 2012, Larry Ellison, co-founder of Oracle Corporation, purchased 98% of Lanai from David H. Murdock for a reported sum between $300 million and $600 million. Ellison now owns most of the land, businesses, and facilities on the island. The remaining 2% is owned by the state and private individuals, including where some native Hawaiians still live. Like the rest of Hawaii, there is no city government. Lanai is part of Maui County. Lanai is represented in state government by a representative and senator who also represent other islands. Many hoped Ellison will diversify the economy’s dependence on tourism and stop the flight of residents who leave because they cannot afford to live on Lanai. Sadly, the island has lost more than 1,000 people since the last census, based on consumption patterns, school enrollment and vacant homes.
As of now, Larry Ellison is the primary owner of Lanai. He bought the island for less than what David Murdock, the island’s previous owner, had hoped to sell it for. On a recent trip to the Hawaiian Islands, we asked some locals how they feel. Knowing the fourth richest person in the world owns the roof over their heads?
Imagine trying to make ends meet while living on an island owned by one of the richest people in the world. That is the reality for some residents on Lanai, who say the power dynamics of land control can get… complicated. “The biggest notice is the change in demographics and construction being built,” said CJ. He was a resident of Lanai. But, unfortunately like most people who called Hawaii home for decades, are now finding it just too expensive to live.
CJ continues, “when I was growing up the majority of the population was Hawaiian or Filipino. The families that worked on the cow plantations, the pineapple plantations and eventually the sugar fields. When I went back in 2015 for a vacation, the influx of affluent residents from the United States was everywhere.” The “New” locals just don’t have the same connection, says CJ.” People CJ’s age (62) are the only locals left. “The younger generation does not see a future here in Lanai,” said CJ.
That is just one view of what Lanai has turned into, surely Ellison has some great plans in store for Lanai’s future. The current owner of the island is Larry Ellison, the billionaire, the software giant. He must have some lofty ideas, he started “The Cloud” for computers. He plans to build out the biggest Celebrity Ultra Rich secluded island. The $300 million purchase came with 98% of Lanai’s 90,000 acres, plus the two resorts that provide most of its jobs, a sizeable chunk of its homes, and all its commercial properties. Overnight, Ellison became everyone’s boss, landlord, or both.
Billionaires like Oprah Winfrey, Jeff Bezos, Peter Thiel, and Larry Ellison all own property there. Many of them flew privately on Ellison’s own airline, Lanai Air. They stayed at one of the two Ellison-owned exclusive resorts (rates from $1,500). Ellison also acquired other resorts, a golf course, the island’s main grocery store, the only gas station, the community newspaper, and the only non-Four Seasons hotel. Ellison now is said to live full time in Lanai. His upscale Four Seasons resort has attracted top celebrities and affluent individuals from around the world, including Elon Musk and Tom Cruise. With parking areas for yachts and private jets, Lanai is an exclusive destination for the most affluent individuals. However, those looking to buy luxury Hawaii real estate will need to shop on another island since Ellison already bought all the property on Lanai.
Many residents both rent from him and work for him. The most shocking story is the provision in his residential leases. It states that if you are terminated from a job with any of his companies, you can be kicked out of your home, too. Under Ellison, 30-day leases have become the norm for Lanai’s small businesses, as opposed to the five-year terms some were used to before.
The Oracle co-founder set out to reinvent agriculture on Hawaii’s Lanai Island. Years later and more than $500 million later, the project is still floundering.
Ellison dreamed of AI-powered greenhouses and robot harvesters feeding the world sustainably. Instead, Sensei has been tripped up by tech snarls, like Wi-Fi issues and solar panels battered by Lanai’s winds. A classic newcomer mistakes. The company-built greenhouses designed for Israel’s desert climate when Lanai is typically muggy. Sensei farms is a shared vision to improve human nutrition while preserving the world’s natural resources, Larry Ellison and Dr. David Agus founded Sensei Farms. Its lettuce and cherry tomatoes now appear at the island’s few local markets and restaurants. But constant delays, leadership shake-ups, and pricey blunders, including cannabis grow houses that needed to be gutted and rebuilt, highlight a tough truth. Even the fourth richest man in the world and his bottomless funding is no match for the hard lessons of a specialized industry.
Early on, Ellison touted his innovative technology would change and modernize agriculture, making a significant impact for society and eventually help grow food in places such as Africa. So far, it’s has mostly been a bust. This is just another succession of white ranchers and sugar planters who traded ownership of the 140-square-mile island. The island is about six times the size of Manhattan. Locals say Ellison is just another rich white rancher. Just give Ellison a few decades and he will be gone. The previous owner of Lanai lost around $25 million a year in expenses. Ellison and his high-end lifestyle have lost twice that amount each year since taking over ownership.
Yes, you can own a home, the median average is over $900,000 dollars. The island is great, but just not the same after a billionaire took over. The pineapples are gone now, and its tourism that supports the residents. The buildings all belong to Ellison. He is the landlord to every business on the island, and he also owns about a third of the houses. Ellison can buy whatever he wants, that is what rich elite do. After traveling to Hawaii years ago and numerous times since. He cannot buy and sell what makes Hawaii amazing.
The Spirit of Hawaii is like the power of its volcanoes! It will devour and burn the wealth of Ellison over time. Just like the lava burns over and rebuilds new. So does the history of ownership of Lanai. Ellison like so many before him, has big plans, lofty ideas, and big pockets. The power of lava created the Hawaiian Islands. That power can be explosive, intense, and unkind. The power of greed sounds familiar. It is great to have, but then the burden of everything tends to way you down, where you might sink.
What I loved about Hawaii was driving a few miles and another legend begins. Stories, structures, and the ocean all tell different stories. Plus, the stories about life that are pictured all throughout the island. Some real and some to keep your soul in place. This is a story of greed or having everything. The Hawaiians have a story they tell about a great chief who ran an island. He wanted everything, and he got it, so much it took his life.
Halaʻea
Halaʻea was a greedy chief. When the fishing canoes would come in with their catch, he would insist, “The fish are mine. Give me the fish!” Every day he would take the entire catch and he and his cohort would feast and then waste the rest of the food. The fisherman would catch the fish but never had any to take to their families. This was upsetting to the people and so they sought means to rid themselves of this oppression.
On the day they planned to fill the canoe of Halaʻea with fish, some of the fishermen planned to go early so they would have an extra-large catch. When they saw Halaʻea approaching their canoes, the fishermen separated their canoes to surround both sides of the chief’s canoe. The fishermen were ready to respond to the greedy demands of Halaʻea and began throwing their large catch from their canoes into the chief’s canoe.
The first load was deposited in the chief’s canoe, then the second, the third, the fourth. Halaʻea was in such joy as he watched the fish get tossed into his canoe that he failed to realize his canoe could not take the weight and was beginning to sink. With the fifth load, the canoe of Halaʻea was in danger of being swamped with the weight of the fish. He called out, “The chief has enough fish!” The men replied, “Not so! Here is all the fish the chief could ever desire!’ They piled in the last load and the canoe began rapidly to sink. Halaʻea looked around for help, but all the canoes had gone back to land and Halaʻea perished in the ocean, surrounded by the objects of his greed.
He was swept away in the swift current that is now named Halaʻea. This current is said to sweep past South Point into the moana (an area at sea where land cannot be seen).
Larry Ellison will never own the spirit of Lanai. Also, the roads are county, the highways are state, the beaches are public property. No one can own the beaches on any island in Hawaii. Except Obama, but that is another story. The cost of the Lanai sale cannot be measured in dollars alone. The first exchange of the island opened doors for more than a century of private ownership on Lanai. Indelibly shaping the island that more than 3,000 people call home today. After visiting year after year, I can tell you that Hawaii and all its islands are magical. From the volcano island to the great waterfall cliff island, (you must go to understand what I am saying). A sense of being so far away, like another world. The plane ride is rough but so worth it. The greatest tropical island in the world, and they still speak English.