Pacific Business News (Honolulu)
Friday, September 12, 2008
by Janis L. Magin Pacific Business News
The owners of the 4,500-acre Hana Ranch have put the oceanfront East Maui property on the market for $65 million and are seeking a conservation-minded buyer who will preserve the remote rural land.
Hana Ranch Partners LLC Ń which includes the mayor of San Francisco, heirs to the Getty Oil fortune and several Montana ranchers Ń recently listed the ranch with Dan Omer of Island Sotheby's International Realty, who is the ranch's former chief operating officer.
The sale does not include the Hotel Hana-Maui, Hana Ranch Restaurant, Hana Ranch Store or Hana Town Center, all of which are owned by Passport Resorts LLC of California.
Hana Ranch Partners is looking for a buyer who will preserve the agricultural land and the ranch operations, whose 1,200 head of cattle produce 1,000 calves per year, and will honor the partnership's commitment to provide some 100 acres of land for affordable housing.
"They are not interested in selling it to a developer, period," said Harrison Sheppard, a San Francisco attorney who also is a member of the Hana Ranch Partners executive committee. "The members of the Hana Ranch partnership are passionately devoted to conservation and have no intention of selling this property to a developer."
The ranch owners had started thinking about selling in the past year or so, but did not actively market the property.
The new listing, which in effect markets the property online to a global audience, was aimed at expanding the pool of potential buyers to Asia, Europe and Canada, Sheppard said.
The partnership plans to issue a statement outlining its reasons for selling after meeting next week, Sheppard said. It also plans to reaffirm its commitment to conservation and the donation of some 100 acres for affordable housing, as well as its intention to sell to a buyer that will preserve the ranch operations, he said.
Such provisions will likely be a condition of the sale, he added.
Maui community members say they hope the buyer will follow in Hana Ranch Partners' footsteps in conserving the land.
"The current owners have been very good to Hana," said state Sen. J. Kalani English, D-E. Maui-Molokai-Lanai, whose family has lived in Hana for generations. "Their tenure there has been one of relative peace and prosperity.
"I have great hope and I have great faith in the current owners that they will do exactly what they say, that they will find someone who is as conservation-minded as them."
Hana Ranch Partners demonstrated their commitment to conservation in November 2002 when they created the first conservation easement for the Maui Coastal Land Trust by permanently protecting 41 acres of land from development, reaping tax benefits while still owning the land.
Placing land under a conservation easement would take much of the value away from the land, which would allow a landowner who is a farmer or rancher to write off 100 percent of that loss over a 15-year period.
A buyer may just want to preserve the land for posterity, too, said Dale Bonar, executive director for the trust.
"There are certainly many people around with money and with that sense of responsibility," he said. "There are people of means with that kind of a personal commitment that it's worth it to them to do their best to keep it in agriculture as much as possible but not to lose their shirt on it."
The majority owner of Hana Ranch Partners is the Ronald Family Trust A, a Getty family trust whose principal beneficiary is Gordon P. Getty, son of the late billionaire J. Paul Getty and No. 503 on Forbes magazine's list of the world's richest people.
Getty's partners are Montana ranchers Roy and Susan O'Connor; Susan Miller and Elon Gilbert, also of Montana; Jim Miller and Shiwei Gao of Berkeley, Calif.; Joseph and Victoria Cotchett of San Francisco; and Shea Halligan of San Francisco.
San Francisco Mayor Gavin Newsom, who is considering a run for California governor in 2010 to replace Gov. Arnold Schwarzenegger, owns 1 percent interest in the partnership. Newsom's father, retired Judge William A. Newsom, is the trustee for the Getty trust and a member of the executive committee.
"They are extremely conservation-minded," Sheppard said. "The representative from the trust, retired Judge William Newsom, his largest personal issue is conservation."
The ranch, which surrounds the tiny town of Hana and separates it from the ocean, comprises some 3,000 acres of pasture land and 1,500 mauka acres of forest preserve reaching the 2,200-foot elevation on the slopes of Haleakala. There also is a two-bedroom plantation house with ocean views.
Founded in 1944 by a retired San Francisco industrialist, Hana Ranch has changed hands three times over the past 25 years.
In 1989, a Japanese group, Keola Hana Maui, purchased the ranch and the hotel for $63 million and set off a six-year battle over a proposed golf course and homes around the course, dividing resident families into those who wanted development and those who wanted to preserve Hana's rural character.
"It really put us into a civil war in Hana," English said. "It was a big fight; it split the community right down the middle."
The development never materialized and bursting of the Japanese real estate bubble in the early 1990s made it doubtful the project would move forward. Meridian Financial Resources bought the ranch and the hotel as one unit in 2000, divided the two, sold the ranch in early 2001 to Hana Ranch Partners for $24 million, and sold the hotel to Passport Resorts, which also owns the historic Post Ranch Inn in Big Sur.
When it bought the land, Hana Ranch Partners told the community it would continue the cattle operation, which has seven full-time employees Ń General Manager Amber Starr and six cowboys. The group also said it would sell large lots of land with possible deed restrictions to provide a return on its investment but that it would conserve open spaces and that it would provide land for affordable housing.
In July 2002, Oprah Winfrey and her former trainer, Bob Greene, purchased more than 102 acres on six parcels from Hana Ranch Partners for $15.5 million and planned to build three homes on the land. However, nothing has been built to date, and there have been no permits of any kind issued since Winfrey and Green bought it, according to a Maui County Web site.
Carl Lindquist, a broker with Hana Coast Realty, said there isn't a lot of concern in the community that any new buyer would bring big development to Hana. In addition to state and county zoning requirements, Hana's remote location Ń accessible by two-hour twist-and-turn drive from Kahului or at a small airport with no regular passenger service Ń tends to be a natural barrier to development.
Even so, people are nervous about what will happen once the ranch is under new ownership.
"The ranch is a huge element of our lives," said Lindquist, whose office is in the Hana Town Center. "It completely surrounds us, so obviously we're always concerned."
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Original article URL: http://pacific.bizjournals.com/pacific/stories/2008/09/15/story1.html