VAMPIRES IN THE CASTLE

Castle & Cooke, Inc. is a Los Angeles-based company that was once part of the Big Five companies in territorial Hawaii. The company at one time did most of its business in agriculture. Today, however, most of the company's business is in real estate and residential, commercial, and retail development.

Castle & Cooke was founded as a partnership between Samuel Northrup Castle and Amos Starr Cooke as a department store that sold farm tools, sewing equipment, and medicine. Over the next few decades, the company invested heavily in Hawaii's surging sugar industry, running plantations in Kohala and Haiku. The company incorporated in 1894.

In the 1910s, the company invested in Matson Navigation Company along with three other Big Five companies. In 1932, the company also bought a 21 percent of the Hawaiian Pineapple Company, which was later renamed the Dole Food Company Castle & Cooke bought out Dole in 1961.

The company maintained Dole's large pineapple plantations throughout the state, including a particularly large one on the island of Lanai, where Castle & Cooke owned about 95 percent of the island.

In the decades that followed, Castle & Cooke began to face severe financial trouble as Hawaii's agriculture industry weakened. In 1985, the company merged with the Flexi-Van Corporation, a transportation leasing company. In 1991, the company was renamed Dole Food Company.

In 1995, the real estate operations of The Dole Food Company were spun off as the newly reformed company Castle & Cooke. The new Castle & Cooke was bought by Dole CEO, David H. Murdock, who remains the CEO of Castle & Cooke today.

Born in 1886, Harold Kainalu Long Castle was descended from successful Hawaii businessman, James Bicknell Castle, who was a partner of Castle & Cooke. Harold K.L. Castle purchased the title to 9,500 acres in the Kailua ahupua‘a in early 1917.

Realizing that the Windward side of the island of Oahu was a beautiful place to live and could become a vibrant community, Harold K.L. Castle and his wife Alice Hedemann Castle set out to do their part in building that community. Mr. Castle donated land for churches of all different denominations because he felt that churches would bring congregations, congregations would bring stability, and that would benefit the community that was growing around them.

Mr. Castle also donated land and money to Hawaii Loa College, Castle Hospital, Iolani School, Castle High School and Kainalu Elementary School and the Mokapu peninsula land, which would become the Kaneohe Marine Corps Base.

The Harold K.L. Castle Foundation was founded in 1962 by Harold K.L. Castle. Upon his death in 1967, Mr. Castle bequeathed a sizeable portion of his real estate assets to the Foundation. These assets are the base from which the Foundation's grants are made.

Harold Castle's son, James C. Castle, was a director of the Foundation since its inception, and succeeded Harold Castle as president in 1968. He held this position until his death in 1994. In 1994, Harold Castle's grandson, James C. McIntosh, was elected President. Directors John C. Baldwin and James C. McIntosh are grandsons of Harold and Alice Castle.

The Foundation is the largest private foundation based in Hawaii. Each year the Directors award grants to nonprofit organizations benefiting the people of the State of Hawaii. Originally, grants focused on the Windward side of Oahu, youth, private education, arts and culture, and health care.

The Foundation’s current investments are focused on public education redesign and enhancement, nearshore marine resource conservation, and strengthening the communities of Windward Oahu.

Since its inception, the Harold K.L. Castle Foundation has awarded more than $143 million in grants, with more than $50 million going to organizations serving Windward Oahu. Currently, the Foundation disburses an average of $7,000,000 in grants per year.

James C. McIntosh, Chairman
H. Mitchell D'Olier, President and CEO
John C. Baldwin, Vice President and Secretary
William E. Aull, Director
Randolph G. Moore, Director

Carlton K.C. Au, Chief Financial Officer and Treasurer
Carlton has worked for Kaneohe Ranch Management Limited and its predecessor companies since March 1986 and for the Harold K.L. Castle Foundation since October 2002. He was previously employed by Peat, Marwick, Mitchell & Co. in various positions from 1976 thru 1985....

H. Mitchell D'Olier, President and CEO
H. Mitchell "Mitch" D’Olier has been a Director of the Harold K.L. Castle Foundation since 1994 and was elected President and Chief Executive Officer of the Foundation in July 2002. He was previously President and Chief Executive Officer of Victoria Ward, Limited. Prior to that, Mitch was President and Chief Operating Officer of Hawaiian Airlines, Inc. and its related companies. Prior to joining Hawaiian, he was a partner in the Honolulu law firm Goodsill Anderson Quinn & Stifel, which he joined as an associate in February 1972.

Mitch is a member and past chair of the Hawaii Business Roundtable; member and past president of the Rotary Club of Honolulu; member of the Board of Advisors and past president of the Boys and Girls Club of Hawaii; and a director of various community organizations.

Mitch and his wife, Bambi, moved to Hawaii from Iowa in 1972. They have three sons, ages 29, 25 and 20.

Terrence George, Vice President and Executive Director
Terry is a 1976 graduate of Punahou School, and he received his B.A. from Stanford University and his M.A. from Tufts University’s Fletcher School of Law and Diplomacy. From 1989 to early 1995, Terry served as program officer for human rights and governance for the Ford Foundation in the Philippines.

From his base in Manila, Terry traveled the length of the archipelago, implementing a grantmaking strategy to increase the capacity of the poor and other disadvantaged groups to use the legal process and democratic institutions to protect and promote their rights and to improve the government’s responsiveness to their needs. From early 1995 until early 1998, Terry lived in New Delhi while managing the Ford Foundation’s portfolios in governance and international cooperation in South Asia. He was responsible for the design and execution of research, policy analysis and dialogue programs to reduce the risks of war and promote greater security and cooperation among the seven nations of South Asia.

Terry moved back home to Honolulu in April 1998 to join the Consuelo Foundation as Chief Program Officer. He was responsible for the design, implementation, supervision, and evaluation of all programs in the state of Hawai‘i. Programmatic goals included strengthening children and families through community development and asset building, preventing child abuse and neglect by strengthening parent-infant bonds, and enhancing the status of women.

Terry joined the Harold K.L. Castle Foundation as Vice President and Executive Director in September 2003. He also serves on several nonprofit advisory boards as well as on the boards of the Entrepreneurs Foundation of Hawaii and the National Kidney Foundation of Hawaii.

He and his wife Julie, who is a second-grade teacher at Kamehameha Schools, have two young children, Gracie and Geoffrey.

Elizabeth Naholowa`a Murph, Grants Manager/Office Manager
Elizabeth is the newest member of the Harold K.L. Castle Foundation team. Her career background is diverse, as she chose being a stay-at-home-mom for many years and worked only as it best accommodated her family. Most recently she worked with Consuelo Foundation on Oahu. While living on the Big Island, Elizabeth worked with the Hawaii Island Chamber of Commerce, C. Brewer and Company, Ltd., Christian Liberty School, Kea`au Elementary and Middle School and New Hope Christian Fellowship.

Elizabeth is Native Hawaiian, Chinese, Cherokee, Dutch and Irish with ‘ohana across the Hawaiian archipelago as well as in the Appalachian Mountains of Tennessee and Virginia. Although born in Honolulu, she was raised as an Air Force “Brat” across the U.S., graduating from A.J. Dimond High School in Anchorage, Alaska. Elizabeth received her B.S. in Computer Science and Information Systems Science from East Tennessee State University. She is married to Timothy and they have four children: Rebecca, Jordan, Sarah and her husband Manly Kanoa, III. Sarah and Manly have blessed them with two wonderful granddaughters, Emma and Grace.

The board and staff members of the Harold K.L. Castle Foundation are encouraged to play active roles in their communities by serving as board members or otherwise being involved with a wide spectrum of nonprofit organizations. This means that, from time to time, potential conflicts of interest or the appearance of such conflicts will inevitably arise. It is the Foundation's policy to deal with such conflicts in as open and appropriate a way as possible.

Conflicting involvements include but are not limited to the following: Foundation board or staff members serving as board members of applicant organizations, immediate family members of Foundation board or staff members serving as board members of applicant organizations, Foundation board members or staff members or their immediate family members being employed by or doing business with applicant organizations.

In case of such conflicts or the appearance thereof, Foundation board members and staff are expected to disclose the conflict prior to making any related grant decisions. Once such a disclosure has been made, the remaining board members will determine whether or not there is a potential conflict of interest. Should it be so considered, the board member involved shall abstain from voting and shall not participate in the discussion of the applicant organization other than to answer specific questions that may be raised by other board members.

In cases where the Foundation's board of trustees decides to award a grant to an organization and one or more of the Foundation's board members has abstained from voting as the result of a conflict or the appearance thereof or a staff member has a conflict or the appearance thereof, such grants and board or staff members shall be identified in the Foundation's web site.

In accordance with this policy since 2003, Foundation Directors and its Executive Director disclosed the actual or potential conflicts of interest noted below and recused themselves from any decisions regarding grants to the following organizations:

Grantee Organization	Harold K.L. Castle Foundation Board/Staff Member Name
All Kinds of Minds	James C. McIntosh
Bishop Museum	H. Mitchell D’Olier
Boys and Girls Club of Hawaii	H. Mitchell D’Olier
Entrepreneurs Foundation of Hawaii	Terrence George
Foundation for Excellent Schools	H. Mitchell D’Olier
Hawaii Pacific University	William Aull
Honolulu Academy of Arts	William Aull Randolph Moore
Honolulu Symphony Orchestra	Randolph Moore
Iolani School	William Aull
Juvenile Diabetes Research Foundation	H. Mitchell D’Olier
Mid Pacific Institute	William Aull H. Mitchell D'Olier
National Kidney Foundation of Hawaii	Terrence George
Oceanic Institute	H. Mitchell D’Olier
Punahou School	Randolph Moore
Rotary Club of Honolulu Foundation	H. Mitchell D’Olier Terrence George
Salvation Army	H. Mitchell D’Olier
University of Hawaii, Sea Grant College	H. Mitchell D’Olier
University of Hawaii, College of Business Administration	H. Mitchell D’Olier

David; This is to inform you that Le Jardin Academy, Inc. will stipulate to your withdrawal as counsel. Please prepare the appropriate Stipulation and forward it to me.

Dole Food Co. is considering a plan to put some of its Hawai'i land up for sale under a strategy to shed nonstrategic or underperforming assets around the world.

Westlake Village, Calif.-based Dole, which is one of Hawai'i's largest private landowners and the second-largest pineapple producer in the state, said the idea is preliminary and does not involve land on which it grows crops.

"We are committed to our pineapple operations there, and our coffee and cacao," said Dole spokesman Marty Ordman from California. "Nothing is changing with that."

Dole last year reported farming about 2,700 acres of pineapple and 195 acres of coffee and cacao on O'ahu. According to the most recent information from the state Data Book, Dole was the seventh-largest Hawai'i private landowner with 28,472 acres.

Ordman said it would be premature to quantify or identify land being considered for possible sale. "It's very, very preliminary," he said of the idea.

Ordman also said he couldn't specify whether the land under consideration for sale is fallow, used by Dole for other purposes than farming, or leased to tenants who farm the land.

If Dole ends up selling Hawai'i real estate, it would add to thousands of acres of agricultural land in the state that has been on the market or sold in recent years, much of which was the result of major pineapple producer Fresh Del Monte Produce Inc. shutting down local operations last year.

The state's largest pineapple producer, Maui Land & Pineapple Co., also has been selling pieces of "noncore" land in recent years.

Maui Land & Pine, which owns more than 25,000 acres on Maui and grows pineapple on roughly 4,000 acres, sold nearly 3,000 acres of mostly agricultural land in the past two years.

Dole disclosed its potential land sale effort in a quarterly financial report, saying the company is "considering a plan to market certain land parcels" in places including Hawai'i and Latin America.

The company has been in the process of selling assets that don't meet its future strategic direction or profit goals.

This year, Dole sold several Chilean farms, and in recent months classified 4,400 acres in California as assets held for sale. Earlier this year, other farmland for fruit and flower operations in California and Latin America were classified as assets held for sale.

Total assets held for sale were valued at $53 million, according to the report detailing three months of business ended Oct. 6.

Dole, which reported $6.2 billion in revenue last year, is the world's largest producer and marketer of fresh fruits, vegetables and cut flowers, and also markets a growing line of packaged and frozen foods.

The company is owned by billionaire David Murdock, who in 2003 bought out other holders of Dole's publicly traded stock in a $2.5 billion deal that took the firm private.

Dole's presence in Hawai'i is a storied one, as it is the place where James Dole founded the company in 1901 as Hawaiian Pineapple Co. and made pineapple production Hawai'i's second-largest industry.

But over the past several decades, with the rise of Dole's international operations and a reduction in Hawai'i farming, much of the company's energy is now concentrated elsewhere.

According to Dole annual reports, the company's O'ahu farming of pineapple on 2,700 acres last year was down from 3,100 acres in 2005. As recently as 2001, the company reported farming 8,000 acres on O'ahu in pineapple as well as papaya and cacao, which included about 1,500 acres the company leased.

Despite the cutbacks, Dole's position in Hawai'i remains significant as a crop producer, employer and landowner.

In addition to the approximately 28,000 acres Dole owns, property records show the company also leases another roughly 20,000 acres, mostly from Kamehameha Schools.

Dole's land holdings don't include property held by its sister company, Castle & Cooke Inc. Castle & Cooke, which owns 98 percent of Lana'i and develops residential and commercial property in Hawai'i and the Mainland, is the third-largest private Hawai'i landowner with about 95,000 acres and also is owned by Murdock.

A decision to sell unproductive land wouldn't change Dole's status as the last major pineapple grower on O'ahu, but Hawai'i pineapple production has been on the decline.

Fresh Hawai'i pineapple production last year dropped to its lowest level since the state began keeping records in 1950.

Much of the reason cited has been competition from foreign producers, and Del Monte's pullout is certain to send local pineapple production to a new low this year.

Florida-based Del Monte quit pineapple production in Hawai'i last year, returning 5,100 acres of leased land in Kunia to local landowner James Campbell Co.

Earlier, in 2004, Del Monte had quit farming pineapple on about 2,000 acres in Wahiawa leased from the George Galbraith Trust.

Campbell has been trying to sell its Kunia land, and has sold or received bids for much of the property, including a purchase earlier this year by Monsanto Co. of 2,300 acres for seed crop operations.

There was a January deadline to bid on the Galbraith land, but the property has not sold.

Andres Albano Jr., a senior vice president with commercial real estate firm CB Richard Ellis, said it has been challenging to sell such vast portions of farmland because the land is often too expensive for small diversified crop farmers but too big for a single user. "There's really no other single crop to replace sugar and pineapple," he said.

Albano, who also was involved in an effort five years ago to sell 70,000 acres of primarily agricultural land on the Big Island and Maui for C. Brewer & Co., said buyers for the Brewer property included wealthy individuals who planned to establish estates or hold the property for possible future development.

Private and public trusts and nonprofit organizations set up to preserve open space also have been active in buying Hawai'i agriculture property.

Bill Mills - Chairman of Bill Mills Development & Investment Company, Inc.; former CEO of Castle & Cooke.

The principal partner of Maui Lani is Bill Mills, chairman of Bill Mills Development & Investment Company, Inc.

Mr. Mills is a well-respected Hawaii businessman. He is a member of the board of directors for Hawaiian Electric Industries, Grace Pacific Corporation, Hawaii Pacific Theatre, and the Historic Hawaii Corporation. He is a Trustee of Hawaii Pacific University, the Nature Conservancy of Hawaii, and St. Andrews Priory School. Mr. Mills is also a member of the board of governors for the Iolani School, and has served as a governor, secretary, and vice-chair of the Hawaii Community Foundation.

The Maui Lani community consists of a number of partners who have combined their knowledge and resources to create a dynamic Central Maui community. Leiane Paci and Dave Gleason are the key local contacts for the development side of Maui Lani....

Maui Lani is the first master-planned community on Maui to receive zoning approval under a “project district” ordinance, which provides for a very flexible and creative approach to planning and development.

This has allowed Maui Lani to create unique land plans and subdivision layouts that sets it apart from anything on Maui and are the reason why Maui Lani Homeowners’ Association exists to oversee the implementation and adherence to the project’s design, controls and overall maintenance.

Maui Lani’s highway, water, sewer, and zoning entitlements are in place, and construction of many new amenities is continuous and evolving every day.

Bishop Estate has incurred serious losses,
a master appointed by the court concludes

Critics of Kamehameha Schools/Bishop Estate renewed calls for the removal of several trustees after a report concluded that the estate posted $264.1 million in losses and loss reserves in its fiscal year ended June 30, 1994.

In a scathing, 120-page critique of the estate’s investment strategies, the court-appointed master for the estate, attorney Colbert Matsumoto, said the trust’s for-profit subsidiary Pauahi Holdings Inc. suffered losses and write-offs that amount to more than 2 ½ times the $100 million annual operating budget of Kamehameha Schools.

Matsumoto, appointed by the state Probate Court to review the operations of the estate for its 1993-1994 fiscal year, said the trust faces additional “unreported loss exposure” of about $1.9 billion from investments and loan guarantees to third parties....

Matsumoto – who charged that the estate withheld information from him – also said that the trust may be using inflated income figures that boost trustees’ commissions and that the trust may be relying on nonstandard accounting practices that overstate its investment returns....

The master’s report comes as the estate is facing intense scrutiny from federal and state investigators. The Internal Revenue Service is conducting an audit of the estate’s finances and state Attorney General Margery Bronster has opened an investigation into allegations of trustees’ mismanagement.

Bronster, through a spokeswoman, said her agency currently is reviewing the report, which only covers a limited period of the trust’s activity. But she said she found it “appalling” that the estate was holding back information to Matsumoto.

Matsumoto, for one, complained that the trust withheld from him information about some real estate deals such as the lease terms of the Kahala Mandarin Hotel.

He said he was only able to discover the terms after reviewing a Supreme Court decision on a tax appeal filed by WKH Corp., the former owner of the posh hotel.

WKH, headed by William Weinberg, was forced to sell the hotel about four years ago to local developer Bill Mills and Tokyo General Corp. after an arbitration panel increased WKH’s annual lease rent in 1992 from about $96,000 to $5.6 million.

(With the sale to Mills and Tokyo General, the hotel’s lease was restructured so that the current hotel owners now pay a base rent of $1.2 million, plus a percentage of gross income that could yield an additional $4.4 million a year, Matsumoto said.)...

(Catbird note: According to Maui County Real Property Tax Assessment records, the owner of one of the pricey homes on Maui is disbarred attorney Marshall Elliott Lippman. Although the total tax assessment value on the land and home, located at 230 Puumakani St., is $508,600, the curious thing is that there is no indication that Lippman actually PAID anything for the property! Oh, well, probably just an oversight. Or...? )

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