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June 22, 2012 (TSR) – The third wealthiest American Larry Ellison, the founder of Oracle Corp., has agreed to buy 98% of the island of Lana’i, from David Murdock, a Los Angeles billionaire who controls Dole Food Co. and many other businesses under Castle & Cooke Inc.
According to documents filed with Hawaii’s Public Utilities Commission, the purchase will include the two resort hotels — the Four Seasons Resorts Lana’i at Manele Bay and the Four Seasons Resorts Lana’i, Lodge at Koele — tand wo championship golf courses and club houses — The Experience at Koele and The Challenge at Manele — as well as more than 88,000 acres of land.
Ellison, with a net worth of $36 billion, according to Forbes, has spent hundreds of millions of dollars on trophy properties in Malibu, Lake Tahoe, Rancho Mirage and other locations where real estate prices are consistently high.
His former yacht “Rising Sun” reportedly cost more than $200 million to build and at a length of 254 feet is too big to dock at most of the world’s marinas.
The report on the deal came from Hawaii Governor Neil Abercrombie who held a meeting with Maui County Mayor Alan Arakawa and Castle & Cook last week to go over the details of the sale, Associated Press says.
The Governor confirms via statement:
“It is my understanding that Mr. Ellison has had a long standing interest in Lana’i. His passion for nature, particularly the ocean is well known specifically in the realm of America’s Cup sailing. He is also a businessman whose record of community involvement in medical research and education causes is equally notable. We look forward to welcoming Mr. Ellison in the near future.”
Lana’i, Hawaii’s sixth largest island, also known as the Pineapple Island, was first seen by western eyes by Captain Charles Clerke in 1779, who took over after James Cook was killed at Kealakekua Bay on February 14.
The island has around 364 square kilometres of land (141 square miles), was once a pineapple plantation and is still sparsely inhabited. Murdock got control of the scenic isle with his 1985 acquisition of Castle & Cooke. The state of Hawaii owns 2% of Lana’i.
The island’s 3,200 residents live mostly in Lana’i City, an upper-elevation town that features quaint plantation-style buildings, several general stores, a small theater, an art gallery, a library, golfing and dining. It is also the smallest publicly accessible inhabited island in Hawaii, but also many visitors consider it the “Most Secluded Island” among all the islands. Lana’i is commonly known as Pineapple Island due to its pineapple plantations. Now the island’s business in mostly focused on luxury tourism and housing. The pineapple industry is being phased back and tourism has started to replace it, though few tourist accommodations exist.
The picturesque island is known for its slow and quiet pace. Only 30 miles of Lanai’s roads are paved, and four-wheel-drive vehicles are needed to take in all of the sights. It can be reached by airplane or ferry.
Murdock said he would keep his home on Lanai and the right to build a wind farm. The wind farm, the Associated Press said, has been a contentious project that would place windmills on as many as 20 square miles of the island and deliver power to the island of Oahu through an undersea cable.
Ellison plans to pay cash, and the deal should result in new jobs, economic stimulus and a reinvigorated local tourism industry, Castle & Cooke said in the PUC documents.
The Maui News, which has been covering the sale for a while, quoted Mayor Alan Arakawa that the island could be under new ownership by the end of the week. Arakawa also said that the county is concerned about the impact of the could have on residents and hopes the Molokai Ranch incident four years ago would not be repeated when operations shut down after heated opposition to further development leaving over 100 residents jobless.
Murdock said in a statement that selling Lanai was not an impulsive decision and that he has been looking for a buyer who would have the right enthusiasm, commitment and respect for the island’s residents.
The price is still to be announced, however reports suggest the asking price was between $500 million and $600 million.
If the PUC approves the sale as expected, Ellison will join the ranks of other rich and famous people who have acquired islands of their own.
Actor and director Mel Gibson shipped an eight-lane bowling alley to his private island of Mago in Fiji in 2006. Actor Johnny Depp, who earned millions of dollars playing the role of pirate Jack Sparrow, paid about $3.6 million for an island in the Bahamas called Little Halls Pond Cay in 2004.
When Bjorn Borg was considered the best tennis player in the world in 1979, he owned a group of 11 islands in the Baltic Sea off the east coast of his native Sweden.