The Vultures on
Maui Land & Pine


 

Sightings from The Catbird Seat

~ o ~

December 25, 2009

Maui Land and Pine harvests last crop

The Honolulu Advertiser

Field workers at Hawai'i's last major pineapple plantation have picked their last pineapples.

Maui Land and Pineapple Co. shut down its century-old agricultural operation yesterday to focus on real estate development.

MLP says its pineapple business has lost $115 million since 2002 and is no longer financially sustainable.

The company is laying off about 285 employees. About 133 workers are being offered positions in the company's other businesses.

Hawai'i's major pineapple producers have shifted growing operations to foreign countries such as the Philippines, where labor is cheaper.

Former and current Maui Land employees hope to form a new company that would continue growing, packing and selling Maui Gold fresh pineapples.

http://www.honoluluadvertiser.com/article/20091225/BUSINESS14/912250351/-1/NLETTER03/Maui-Land-and-Pine-harvests-last-crop

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Also see

VIEWS FROM THE CATBIRD SEAT

 


 

March 27, 2006

The Exchange

By Anthony Pignataro, Maui Times

WHO GAVE: John Garibaldi — President, Hawaii Superferry, Inc.

WHO RECEIVED: Governor Linda Lingle

AMOUNT: $2,800

Lost in all the discussion over what will happen with the state Senate’s compromise bill that requires a full Environmental Impact Statement on the proposed Superferry (at taxpayer expense) but allows Hawaii Superferry, Inc. (HSF) to start operations this July is what will happen if the bill manages to make it all the way to Governor Linda Lingle’s desk. Don’t expect it to be pretty. In addition to Garibaldi’s contribution cited above, here’s what HSF principals and investors gave to Lingle during the 2006 campaign:

John Lehman (HSF Chairman): $3,000

Christopher McKenna (Lehman Brothers): $2,500

Tig Krekel (HSF Vice Chairman): $3,000

David Cole (HSF Director/Maui Land & Pineapple President, Chairman and CEO): $4,000

Margaret Cole (David Cole’s wife): $6,000

Stephen Case (HSF investor): $3,000

When all that’s added to Garibaldi’s $2,800 contribution, HSF, its directors and investors gave Lingle $24,300 in total during her 2006 reelection campaign. Where I come from, that translates into the bill being Dead On Arrival when Lingle gets it.

~ ~ ~

From The Hawaii Superferry website:

David C. Cole is president, chairman and chief executive officer of Maui Land & Pineapple Co. Cole earned a bachelor’s degree in liberal studies from the University of Hawaii. Cole is also currently president of Aquaterra, Inc., an investment management firm. He was chief executive officer at the software company Ashton-Tate, president of the computer magazine publisher Ziff Communications and the Ziff-Davis Publishing Group, and chairman, president and chief executive officer of the Internet-based software company NaviSoft Inc. He was also an officer at America Online after it acquired NaviSoft in 1994.

Cole is currently chairman of the 425-acre Sunnyside Farms, a specialty consumer products retailer and supplier of premium organic meats and produce in Virginia. He is also a director of Twin Farms Collection, a luxury resort company with properties in Vermont and California, Grove Farm Co., Inc., Island Press, Sesame Workshop and PBS.

Other affiliations include Chancellor's Advisory Council of Maui Community College, Maui Economic Development Board, Maui Chamber of Commerce, and Kamehameha Schools Board of Advisors. Cole is a former director of The Nature Conservancy and World Wildlife Fund and presently serves as chairman of The Nature Conservancy of Hawaii.

www.kycbs.net/Hawaii-Superferry-Directors.mht


 

November 14, 2008

Maui L&P CEO could get $2.45M

BY RICK DAYSOG, Advertiser Staff Writer

David Cole, who will step down as Maui Land & Pineapple Co.'s CEO at the end of the year, will receive $450,000 in severance pay but could receive another $2 million in other payments.

In a filing with the Securities and Exchange Commission yesterday, MLP said the company is treating Cole's resignation "as a termination without cause" for the purposes of setting his severance and other post-retirement benefits.

"Mr. Cole's resignation is not as a result of any disagreement with the company on any matter relating to the company's operations, policies or practices," MLP said.

MLP announced last week that the 56-year-old Cole was stepping down after serving as the company's CEO since 2003. He will be replaced by Chief Operating Officer Robert Webber.

Cole's resignation was announced as the company reported an $8.7 million loss for third quarter 2008.

According to MLP's proxy, dated March 27, 2008, Cole is entitled to $450,000 in cash if he leaves the company "without cause."

The proxy noted that Cole also is eligible for more than $4.2 million in stock options and restricted stock awards, whose payments would accelerate with Cole's resignation.

But company spokeswoman Terri Freitas Gorman said the $4.2 million figure is based on MLP's stock price in March, which was about $30 a share.

Currently, MLP's stock is trading at $15.03, meaning that Cole's accelerated stock awards would be worth half, or about $2 million.

Gorman added that any severance-related stock awards require the approval of MLP's board, which has not yet taken action on the matter.

The Honolulu Advertiser


 

February 2, 2006

Del Monte to close pineapple
operations in Hawaii

CBC News

Del Monte Foods Co. the company that made Hawaii famous for its pineapples — is shutting down its operations on the islands because it is cheaper to grow the fruit somewhere else.

"It would be cheaper for Del Monte to buy pineapples on the open market than for the company to grow, market and distribute Hawaiian pineapple," the company said.

Formerly a part of RJR Nabisco, it was bought by Texas Pacific Group in April 1997.

The last crop will be harvested in mid-2008 with the loss of about 700 jobs.

The departure of the Del Monte operations may affect the viability of the two remaining pineapple companies in Hawaii, Dole Pineapple and Maui Pineapple Co., said Fred Galdones, president of International Longshore and Warehouse Union Local 142.

"I hope it's not a domino effect like it was with the sugar companies, where one had closed and the others followed suit," he said.

Del Monte claims to be the largest producer and distributor of branded processed fruit and vegetables in the United States, with sales of $1.3 billion US in 2001. It has plants across the United States and in Venezuela....

Del Monte began pineapple operations in Hawaii 90 years ago.

http://www.cbc.ca/money/story/2006/02/02/delmonte-060202.html


 

April 10, 2005

Old leaders question
new ones at ML&P

By HARRY EAGAR, Maui News

KAHULUI – One way to quantify the difference between the old Maui Land & Pineapple Co. and the new ML&P is to compare two employee housing projects – Kapua Village and Pulelehua.

Kapua Village was the 11-acre employee housing project at Mahinahina that ML&P began planning in the early 1990s, receiving initial approvals in 1997. But opposition from surrounding residents blocked development for more than five years, with construction and sales finally allowed in 2003.

Pulelehua is a 312-acre project district planned as a mixed-use residential development primarily for ML&P workers, which ML&P is trying to get permitted almost 10 times as fast. New Chief Executive Officer/Chairman David Cole unveiled the concept last year and expects shovels in the ground by this time next year.

The qualitative differences are more difficult to put a finger on.

But they do not sit well with two former directors: members of the Cameron family that put together, and managed ML&P over nearly four decades.

Mary “Maizie” Cameron Sanford says, “I feel sorry for the old-timers, not just the executive ones but the workers.

“They haven’t come to me (to complain), but I have certainly heard when I have listened to them. They miss the old days. It’s not the same company anymore.”

The man who is changing it, Chairman Cole, would hardly accept such a critique without qualifications.

He is trying to restructure ML&P from the ground up. He says that when he came aboard (as president, at first) in late 2003 and did a 100-day assessment, “the company was broken in every single line of business.”

Last month, he told employees that, without changes, Kapalua Resort was “heading for extinction.”

At the same time, he contends that the business changes can be made without giving up the qualities that made ML&P, the largest company with headquarters on Maui, a community stalwart. Qualities that Sanford sums up as “integrity.”

Under her father, J. Walter Cameron, and her brother, Colin Cameron, she says, ML&P “did have integrity. It was a company to be relied upon.”

It was not unique in Hawaii, but it was a notable example of a company that made it its business to get involved in lots of things – from the founding of the J. Walter Cameron Center to the Maui Pacific Center to the Kapalua Music Festival.

Cole, who got to know Colin Cameron through The Nature Conservancy, also considers that he is carrying forward that tradition of being a corporation concerned with more than profit-and-loss statements.

Cole was recently elected chairman of The Nature Conservancy of Hawaii, for example.

As ML&P chairman, Cole worked with employees to devise a written mission statement. He appears to consider it as a more formal expression of the spirit in which the Camerons directed their enterprise, even if their style was less given to formal statements and huge meetings with staff.

Cameron style was more along the lines of company picnics and connections made through generations of living together as employer-employee (or luna-worker in plantation days) on a small, isolated island....

Maizie Sanford admits that much of her distress at Cole’s direction of the company is “sentimental.”

More specific criticisms of the business policies of the new ML&P come from Sanford’s daughter, Claire Sanford.

Sanford, who lives in Massachusetts, was on the board of directors and was the only member of the old board to vote against offering the presidency to Cole, with a contract that she felt was outrageously overpriced in stock options.

Shortly after Cole came in October 2003, he discovered a box of gold pineapple pins in the corporate offices. Nobody could remember their origin, but they appeared to have been given out as retirement or longevity markers at one time.

A year ago, Cole gave the pins to some of the longest-serving Maui Pineapple Co. employees at his first big confab with the staff at Maui Arts & Cultural Center.

About the same time, at a board meeting, he gave pins to the two Sanfords.

According to Maizie Sanford, her daughter asked if that meant she “was being retired, too,” and that Cole responded along the lines of, “Of course not, you know how much we love you.”

However, Claire Sanford was not renominated when her term expired, and Maizie Sanford, who was a director emeritus (with no vote), was also let go.

Claire Sanford, in a telephone interview, said, “I can only speculate as to why I was not renominated.

“They could say they were looking for strong business background.”

Cole says: “I felt it was a corporation going stale,” so he went for a board of “broader expertise . . I didn’t see any point in continuing emeritus members.”

There were two at the time. The other was Daniel Case, a Honolulu lawyer and the father of Steve Case, Cole’s business associate and the owner of the largest block of ML&P stock.

At any rate, says Claire Sanford, “I was the only person voting against what David Cole was requesting. . . I could be looked on as somewhat of a troublemaker.”

For a while last year, the Camerons were under the impression that they would have no representation on the ML&P board as of January.

That would have been extraordinary. Steve Case owns more than 40 percent of the stock, but the Cameron family has nearly 40 percent.

In the past, it was voted together, and along with another, smaller block of stock in an Employee Stock Ownership Plan, gave the family control of the company, even if it did not hold a majority of the shares.

Although ML&P is a thinly held public company, so comparisons with more widely held companies are not necessarily valid, it would ordinarily be unusual for an ownership interest so large not to take a seat (or seats) on a corporate board, if it wanted them.

As it happened, however, at a board meeting earlier this year, Richard Cameron, who was chairman when Case bought into the company in 1999, was asked to stay on the board.

Referring to the wholesale replacement of Maui residents – both Camerons and veteran executives that he ousted – Cole said he recognized “the special needs the people of Hawaii and of Maui have from their business leaders.

“Richard is an extremely valuable board member in that respect. He’s been connected for a long time through the Kapalua Charities.”

Richard Cameron is chairman of Kapalua Charities, which raised and distributed $353,536 to community-service organizations this year through the Mercedes Championship golf tournament.

With a foot in each camp now, Richard Cameron said he did not want to discuss the internal workings of the board....

While Maizie Sanford is more concerned with the feeling of the company, Claire Sanford is skeptical of the business direction.

This has to be looked at in two parts: Maui Pine, the core company; and Kapalua Land Co., Colin Cameron’s innovation when he decided to remake a plantation into a resort and real estate enterprise.

Maui Pineapple is continuing a strategy that began under the old board, moving from canned to fresh. Only, the new Maui Pine is moving much faster.

Claire Sanford considers that pine wasn’t doing as badly as Cole has claimed. She says that if you eliminate a costly legal battle over ownership of the Maui Gold variety (won by Maui Pine) and some other expenses, pine was not in such terrible shape.

Cole shook up both his employees and the Camerons when he announced the end of pine at Honolua in West Maui.

But, after bringing in Oahu experts in growing pine for the fresh fruit trade, he changed his mind, and plantings have been expanded at Honolua.

While his predecessors at ML&P were cutting back the largely unprofitable canned product, he has slashed it ruthlessly.

At the employees’ meeting, Maui Pine President Brian Nishida said Maui Pine is abandoning its attempt to compete with foreign canned pine for places on supermarket shelves....

Continuity is not quite so linear at Kapalua, however.

The resort has lost a good deal of its eclat, especially the Kapalua Bay Hotel. ML&P, which had sold the hotel but kept the land under it, watched as a series of owners ran the property down.

Under Cole, it exchanged the land for a 51 percent interest in the land and the hotel. And then announced that it would be torn down.

That shocked many, including Maizie Sanford, who said the hotel had been her brother’s “pride and joy.”

She says she has heard, secondhand, that the employees also are “unhappy,” as well they might be, since many will be out of work from 2006 to 2008, unless Cole can find alternative work for them, which he is trying to do.

The extensive changes to the resort also shocked many, including some longtime patrons of the Kapalua Bay Hotel. Some complained when they learned that it will be replaced with a membership club, which will cost $375,000 to join.

One couple, who had honeymooned at the Kapalua Bay Hotel and returned every year, e-mailed The Maui News that they were heartsick at the thought of not being able to return.

Claire Sanford says “the jury is still out” on whether the massive reinvestment and redirection of the resort will make money.

She contends that Cole has spent so much ML&P money on things like the Hawaii Superferry (a $1 million investment) and lawsuits, not to mention high executive compensation, that it puts the company in a financially precarious position.

“It’s hard to say,” she says, because now that she is no longer on the board she no longer knows as much about the internal financial arrangements. “I am not privy to the strengths and weaknesses.”

But she worries.

She has no intention of selling her sizable stock holdings, and her mother says she “cannot bear” to think of selling her even larger block, though both could realize millions over what the stock was worth when Cole took over.

Though the price varies, the stock price has roughly doubled.

The focus on stock value – not surprising when the principal owner is the man who made a great deal of money for himself on stock price swings and lost even more for investors – disturbs Maizie Sanford.

“I was brought up to think that the important thing was that the company cared for its employees and the stock was to generate dividends,” she says. “That’s what we (the family) relied on.”

She acknowledges that “Maui Land and Pine was not paying dividends for a while,” because it was losing money most years.

As Claire Sanford points out, it still isn’t paying a dividend.

When the negotiations over hiring Cole were under way, she says, “One of the things we spoke about was we all felt very strongly that a good indicator of a strong operation is paying dividends.”

Cole “gave us the answers we were looking for,” but, “I think he was speaking out of both sides of his mouth.

“I don’t think the company in any better position now. Dividends have not been forthcoming.”

“To say raising the value on the stock market is the right thing to do – to my mind – is not it,” Maizie Sanford says.

Never sold on Steve Case, who swapped AOL stock for the giant Time-Warner company, then watched the combined companies shrink in the eyes of Wall Street to the value of what either one had been worth alone, Claire Sanford wonders what is really behind the deals of three Case-controlled companies: ML&P, Exclusive Resorts and Miraval, Life in Balance.

“It leaves you wondering who truly benefits from decisions the board is making right now,” she says. “I’m not benefitting.”

Exclusive Resorts is the outfit that sells the right to pay to stay in the yet-to-be-built Kapalua Bay Hotel (or others in its stable) for $375,000. It is a partner in rebuilding the hotel.

Miraval, an Arizona spa, is partnering with Kapalua to build three spas, also as part of the redevelopment of the old hotel.

Steve Case is the major shareholder in ML&P and the majority shareholder in both Miraval and Exclusive....

Case bought into ML&P in 1999, working out a right-of-first-refusal arrangement with the Camerons, by which he would get their shares at a negotiated price if they wished to sell. (The negotiated price turned out to be problematic, and some of the transactions went to arbitration, but neither side is commenting.)

Claire Sanford was not happy. She said the family really didn’t know Case, except as a celebrity businessman.

“He perhaps gets more press in the East, certainly a lot more negative press,” she says.

But he was presented to the family as a “white knight” who would help them out of a conundrum with the Harry & Jeannette Weinberg Foundation.

Harry Weinberg, the most successful stock speculator in Hawaii history, had been at loggerheads with Colin Cameron, a hard-nosed businessman who manipulated his board to keep Weinberg off when he thought Weinberg was out to break up the company.

But when Weinberg died, his block of stock went to the foundation, which was on excellent terms with the family and the old management.

However, Weinberg wrote a will that put his foundation in a bind for cash – it could not stand to hold such a large block of stock that was not paying dividends.

ML&P hired Dan Case, who had done legal work for it before, to investigate how to rescue the foundation without either breaking up the company or bringing in incompatible new investors.

“The Weinberg representatives were very respectful of the family’s heritage and feeling toward the island,” says Claire Sanford, whose husband served on the Weinberg board in Baltimore and grew to understand and admire its members.

She was not, and still is not, persuaded that Case or Cole have the same feelings, despite their backgrounds as “local (Oahu) boys.”

“I thought Steve Case was not really a very good alternative,” says Claire Sanford. But she said, “I didn’t have a viable alternative.” So she went along.

She describes other members of the family as “extraordinarily naive” in accepting Dan Case’s description of Steve Case as a white knight.

“I did not like the way that Steve Case’s father brought him to us,” she says. “He had been our lawyer, he knew exactly where we stood.

“We were practically naked before Steve Case, but we knew very little about him.”

In his filings with the Securities and Exchange Commission, Steve Case said he had no plans to change the company, and in the early years he didn’t.

In fact, says Claire Sanford, he wasn’t around and didn’t talk to people much.

But she is critical of what Dan Case did, without being specific.

“His father was extremely involved, in my opinion inappropriately, pressuring Gary Gifford to do different things.”

She says she thought Dan Case was “overstepping his bounds as a board member,” though when Dan Case became an emeritus member that slowed down.

Dan Case did not return calls for this story, nor did Gifford, who was the chief executive officer until retired – actually forced out – by Dan Case two years ago. Richard Cameron, board chairman at the time, also stepped down, although he remained as a board member.

Whether Dan Case already had Cole in mind to run ML&P is unknown, but Cole says they had been involved in several business deals together. AOL bought a software company headed by Cole, and Cole became president of AOL’s New Enterprises Group.

When Cole left AOL, a no-competition agreement kept him from returning to the digital economy, so he started an organic farm in Virginia and a small but pricey resort, Twin Farms, in Vermont.

Steve Case was his partner in some of these and other ventures, including real estate deals.

Cole, for example, is on the board of Grove Farm on Kauai, another old-time Hawaii company with lots of land and little income that Steve Case bought control of....

http://www.mauinews.com/story.aspx?id=7757


 

April 22, 2004

State land swap called a bad deal

A Maui firm wants to trade
industrial lots in Waipahu for
state agricultural land

By Nelson Daranciang, Star-Bulletin

Some lawmakers say the state is making a bad deal in giving up 226 acres of agricultural land in Kapalua for 1.4 acres of industrial property in Waipahu.

Maui Land & Pineapple Co. wants to include the state land in an expansion of its luxury Kapalua Resort development. The state land is a narrow strip in the middle of the company’s property.

In exchange the state would get three vacant lots, totaling 1.4 acres, in the Mill Town Center industrial park in Waipahu that Maui Land & Pine will purchase from Alexander & Baldwin for the exchange.

Rep. Alex Sonson (D., Pearl City-Waipahu) said he thinks Maui Land & Pine is getting the better end of the deal.

“Much better, a lot better,” he said.

He said the Maui land is undervalued while the Waipahu property is overvalued.

According to land appraisals by Medusky & Co., the Kapalua land, which is mostly gulch, is worth $1.5 million, while the Waipahu property is worth $1.6 million.

Sonson said the appraisal does not consider how much the property will appreciate because of the Kapalua project. Maui Land & Pine leases the land for $6,060 a year to grow pineapple. It is asking the state Land Use Commission to reclassify 60 acres of the state property from agriculture to urban in anticipation of the exchange.

The state is expecting annual lease rents from the Waipahu property of $98,400 to $131,200. Sonson said there is a lack of Mill Town Center tenants....

The state Board of Land & Natural Resources agreed in principle to the Kapalua land exchange in October.

According to state law, the state can complete the deal after it is reviewed by the Legislature. Lawmakers can reject the exchange with a two-thirds vote in either house of the Legislature or by a majority vote in both houses.

Because of concerns expressed by Sonson and other lawmakers, the House Water, Land Use and Hawaiian Affairs Committee recommended passage of resolutions prohibiting the construction of homes on the upper portion of the state land and limiting the lower portion to park and open space.

If Maui Land & Pine wants to remove the restrictions, it must pay the state the added value of the land, under the resolution.

The House approved two resolutions, State Concurrent Resolution 9, HI1, and House Resolution 157, HD1, asking the state to include the conditions in the agreement.

Dede Mamiya, Land Division administrator in the Department of Land & Natural Resources, said the state would add the restrictions to the exchange deed.


 

September 18, 2003

Kula Community Association Response to
Upcountry Town Center Revised
Draft Environmental Impact Statement

To:     Jeffrey H. Overton, Chief Environmental Planner
Group 70 International, Inc.
925 Bethel Street, 5th Floor
Honolulu, HI 96813-4307

Dear Mr. Overton:

Subject: Upcountry Town Center (UTC) Revised Draft Environmental Impact Statement (R-DEIS)

The Kula Community Association (KCA) Board of Directors met on September 9, 2003 to discuss the Upcountry Town Center DEIS. The KCA Board wishes to place on the official DEIS record the following general comments, specific comments, and recommendations. We expect that the Final EIS will address both our concerns and questions. Furthermore, we ask that the Land Use Commission, Office of Environmental Quality Control, and the Maui County Planning Department and Planning Commission seriously consider the issues which we raise.

General Comments

A. We request that the Final EIS reflect and respect the thought that went into developing the Makawao-Pukalani-Kula Community Plan adopted as an ordinance in July, 1996....

The Citizen Advisory Committee, Maui Planning Department, Maui Planning Commission, and the County Council all confirmed the community’s wish to leave this area in agriculture. Now, only seven years since the Community Plan was adopted, Maui Land and Pine (ML&P) is again proposing to re-designate their 40-acre parcel at the Pukalani Triangle. The Final EIS should explain what is significantly different now from when the Community Plan was adopted as an ordinance.

B. The DEIS fails to include a realistic discussion of the existence and effects of the large Kulamalu commercial, senior housing, and park development. This is the “Town Center” proposed in the Community Plan.... If the DEIS had accurately described the scale of the Kulamalu project, we believe that a very different and more accurate DEIS would have been produced....

The DEIS ... indicates Competitive Floor Space for the nearby Kulamalu commercial development at only 54,000 square feet. Our discussions with the developer, Everett Dowling, indicate plans for considerably more floor space. Please confirm the DEIS estimate with the Kulamalu developer and, if necessary, provide a recalculation and re-analysis within the Market Study.

C. In 2002, in response to the original DEIS, the Kula Community Association wrote a long letter to GROUP 70 INTERNATIONAL, INC. with many concerns about the UTC. Unfortunately, the reply by GROUP 70 was inadequate, vague and incomplete....

Recommendations

Until the impacts of the Kulamalu build-out are accurately ascertained, the KCA Board of Directors requests the UTC project be delayed...

The EIS should not try to justify the UTC project on the premise that this agricultural site is a mere remnant of ML&P’s pineapple operations and is therefore unsuitable for agricultural use. ... When the Pukalani Bypass was built, the State of Hawaii (we taxpayers) paid Maui Land and Pine a significant amount (reported to be over $4,000,000) because of ML&P’s reduced ability to farm the proposed UTC site.

Now that the Pukulani Bypass is completed, ML&P wants to use the highway to justify the land use change....


 

September, 2003

HAWAII’S 20 WEALTHIEST LANDOWNERS

Hawaii Business

The September, 2003 issue of Hawaii Business has an article on Hawaii’s 20 wealthiest landowners. The article states that Kamehameha Schools is Number 1, and is the state’s largest private landowner by far, today holding more than 366,000 acres on five islands.

The article goes on to state that probably the most recent kamaaina landowner of consequence is AOL-Time Warner’s Steven Case (No. 17).

According to Hawaii Business, “A Punahou School graduate and benefactor, Case has also placed a sizeable statewide footprint down through his 1999 purchase of a 41 percent minority interest in Maui Land and Pine (AMEX; MLP), and his more recent acquisition of Grove Farm and Lihue Plantation.

“Hawaii Business accorded Case a 41.4 percent share of the assessed value of MLP’s 41.4 percent share of the assessed value of MLP’s holdings, which gave him almost 12,000 acres on Maui and more than 40,000 Kauai acres for a total value of $300 million....”

< < < FLASHBACK < < <

June 1996

Pineapple’s Lasting Legacy: The Poisoned Wells of Maui

Environment Hawaii

In June 1979, John Mink, a hydrologist under contract to Maui Land & Pineapple Company, conducted a series of water quality tests. The U.S. Environmental Protection agency had asked for the tests to determine if a chemical used to control nematodes in Hawaiian pineapple fields was migrating to the water table, as has occurred elsewhere in the United States.

Mink tested 10 sites, selected because of their proximity to pineapple fields where the chemical dibromochloropropane (or DHCP) had been used. DBCP turned up in five of the 10 sites, at levels ranging from .26 parts per billion, at a spring in Honolua, to 2.23 ppb at Pauwela. At springs feeding into Makilo gulch, DBCP concentrations were as high as 1.7 ppb....

More than a year later, people who had been drinking water from the Makilo spring learned of the contamination and were understandably upset. When David Williams, agricultural research director for ML&P, was asked why residents in the area were not informed, he was reported by The Honolulu Advertiser to have responded: “Why should we tell anyone we were testing anyway? The information was published with the EPA. We can’t go around looking for every backwoods person who doesn’t know what they are talking about. I tell you nobody drinks that water.”

But at least three families living in Maliko Gulch were drinking it – and using it to irrigate truck crops and water livestock.

In 1977, California banned all further uses of DBCP, citing concerns over health effects on exposed workers. DBCP was known to cause cancers in test animals and was suspected of causing cancers in humans. In addition, workers exposed to DBCP were now experiencing reduced fertility and lower sperm counts. Shortly after California implemented its ban, the EPA announced a schedule for phasing out most uses of the pesticide. Only in Hawaii, as a result of special pleadings by the Hawaii pineapple plantations and the highest officials in state government, would use of DBCP be allowed to the extent past 1981....

Only on Maui

Dole had stopped using it on Oahu in the late 1970s, and in 1981, announced it would suspend use of DBCP on Lanai. Del Monte had never used much DBCP on Oahu to start with, and had stopped using it on Molokai fields in the 1970s.

That left Maui Land & Pine as pretty much the sole user affected when in January 1981, a settlement was reached on an appeal of the EPA’s ban on DBCP. Manufacturers agreed to withdraw requests for registration of DBCP for use on other crops, while pineapple growers in Hawaii agreed to accept new safety regulations on DBCP use in the islands, including a requirement that field workers wear full-body protective gear and that application occur at least 270 days before harvest.

EPA Administrator Douglas Costle approved the settlement, overriding the recommendations of an administrative judge within his own agency. DBCP, Costle found, “does not result in unreasonable adverse effects to man or the environment,” as used in Hawaii....

Faced with growing evidence of water contamination, in January 1985, the EPA ordered Maui Land & Pine to stop its use of DBCP within two years....

The Last Holdout

Within a month of the order, Maui Land & Pine had requested approval for use of DBCP on 2,100 acres – even though news reports at the time said the company’s existing inventory of DBCP would have allowed treatment of just 450 acres. According to a report by Barbara Hastings in The Honolulu Advertiser of March 2, 1985, Joseph Hartley, company president at the time, “said the EPA wants his company to use up not only what it has of DBCP, but also any remaining stocks on the Mainland....

A public meeting on the plan was scheduled to be held in Kahului on March 20. Five days before, newspapers across the state reported additional well contaminants had been found in two Maui wells. Tests at the Old Maui High School, shut down as a water source two years earlier because of DBCP concentrations at both sites remained significant ...

The hearing lasted more than seven hours, with most of the speakers testifying in fervent opposition to continued use of DBCP. One of the few testifying in support was Douglas MacCluer, plantation manager for Maui Land & Pine. According to the Star-Bulletin of March 21, 1985, MacCluer “noted that after over 25 years of DBCP use, no residues from the chemical found in any municipal water supply have ever been attributed to the company’s farming operation.”

Officers of the company also made the argument that using up Mainland supplies of DBCP on Maui fields was the environmentally safest way to dispose of existing stocks – an argument that left many Maui residents complaining that their island was to become the dumping ground for a chemical deemed too dangerous for use elsewhere in the United States....

A Time Bomb

While use of DBCP on Maui effectively ended in 1984, tons of the chemical remain in the soil. According to studies done at the University of Hawaii Water Resource Research Center, DBCP and EDB can and do work their way through the topsoil, through the underlying basalt, and into the freshwater lenses that serve as drinking water sources....

On Maui, groundwater contamination was known to exist at the Old Maui High School site, at Maliko Gulch springs, and at Pauwela – all in east Maui – and at Honolua, along the west Maui coast. Since none of the sources was used for drinking water, no official concern was raised over the degree of contamination – nor does it appear as though water quality was monitored on a regular basis. ... Throughout the 1980s, Maui drinking-water wells, tested every four years, remained clean....

All that changed in February 1992, when DBCP turned up in a well at Napili that supplied the Maui County water system’s service to Napili and parts of Lahaina. Initial concentrations of DBCP were scored at 100 parts per trillion, while tests over the next year showed concentrations as high as 360 ppt – nearly 10 times the state maximum contaminant level. Nearby wells used by Amfac to supply resorts, condominiums, and houses at Kaanapali also showed high levels of DBCP (up to 210 ppt)....

The County Sues

Maui County is not the only area where DBCP has turned up in drinking water sources. DBCP-contaminated wells have turned up throughout the central plain on Oahu and at Moloaa, on Kauai....

Starting in the early 1980s, several California cities and towns whose municipal water supplies were contaminated with DBCP brought suit against the manufacturers and distributors of the chemical, including Dow Chemical Co., Shell Oil Co., Occidental Chemical Co., and Amvac Chemical Corp. Most sought recovery of their past and future costs of bringing the water up to drinking-water standards.

Litigation in California dragged out for more that a decade, but starting in the 1990s, city after city entered into settlement agreements with the chemical makers. One of the largest settlement packages – $32 million in cash, plus a contract, valued at $70 million, for payment of 90 percent of water treatment costs for the next 40 years – came six months into the trial of the complaint brought against the manufacturers by the city of Fresno....

According to Duane Miller, lead attorney for the city of Fresno, the chemical manufacturers were aware of DBCP’s potential to contaminate water long before it actually turned up in water supplies. In fact, he said, evidence showed they had discovered DBCP in well water long before August 1977, when California authorities first detected it.

“They were aware of scientific studies showing that the chemical didn’t break down and would migrate in the soil,” Miller said, but did not provide this information to the EPA, even when the federal government specifically requested it in 1970.

The outcome of the Fresno litigation appears to have been the inspiration for a lawsuit filed by Maui County against DBCP manufacturers just last month over the contamination of the Napili well. The lawsuit was filed on May 3, 1996, two years after the Napili well was forced to close. Named as defendants are manufacturers Shell, Dow, Occidental and Amvac, and Brewer Environmental Industry, Inc., which sold DBCP in Hawaii.

According to Corporation Counsel J.P. Schmidt, the suit was filed before the county had the opportunity to do extensive research, since the county felt that, under one theory of law, it was up against the two-year statute of limitations. Customarily, a party has two years from the time of the discovery of a “wrongful act” to file suit. If, however, the contamination is regarded as a “continuing nuisance,” the statute of limitations is a little more liberal, Schmidt said. In any event, the county acted when it did to protect its legal interest under the more conservative reading of the statute of limitations, he said.

Maui Land & Pine is not named as a defendant in the county’s lawsuit. Always in the past, users of agricultural chemicals have been regarded as legally untouchable, so long as they applied and disposed of those chemicals in accordance with EPA-approved label instructions.

If the county discovers that Maui Land & Pine used the chemical in a manner not sanctioned by the EPA, however, the county could still add the company as a defendant, Schmidt said.

www.environment-hawaii.org/696cov.htm


 

December 30, 2004

Maui L&P CEO gets $4 million in shares.

By Sean Hao, Honolulu Advertiser

Maui Land & Pineapple Co. issued 100,000 shares in the name of president and CEO David Cole this week, and Cole said he has no intention of selling the stock.

Under terms of Cole’s contract most of those shares are restricted and cannot be sold, Cole said yesterday. However, Maui Land & Pine was required to register the securities - worth nearly $4 million - with the Securities and Exchange Commission.

“That’s just a requirement under my employment contract,” said Cole, who became CEO of Maui Land & Pine on Oct. 15, 2003.

“I have no plan to sell any of those shares at the present time. I just got here.

Those shares, along with options to acquire an added 200,000 shares, become vested over a four-year period that extends through 2007. The amounts and timing vary depending on whether the company meets certain performance benchmarks.

Maui Land & Pine has undergone management changes over the past year. It has expanded it board of directors, announced Kapalua Resort plans and progressed toward expanding fresh pineapple sales.

Its stock has risen 42 percent from $27.60 when Cole became chief executive to yesterday’s closing price of $39.31 on the American Stock Exchange. That equates to about an $85 million increase in the value of the company’s outstanding shares.

For more, GO TO > > > Dirty Money, Dirty Politics & Bishop Estate - Part IV

 

 

# # #


 

MORE TO COME


 

 

Meanwhile, you can browse through the following as you’re having your breakfast birdseed in a paved parking lot, a junk yard, or under a bridge somewhere...

ACT 221

ALEXANDER & BALDWIN

ALOHA AIRLINES

ALOHA, HARKEN ENERGY!

APOLLO ADVISORS

ARBITRATE THIS!

THE BLACKSTONE GROUP

BROKEN TRUST: THE BOOK

BUZZARDS OF PARADISE

BUZZARDS ON THE BAR

THE CARLYLE GROUP

CLAIMS BY HARMON

CONFESSIONS OF A WHISTLEBLOWER

DIRTY GOLD IN GOLDMAN SACHS

DIRTY MONEY, DIRTY POLITICS & BISHOP ESTATE

THE FIRING OF EVAN DOBELLE

FLYING HIGH IN HAWAII

THE FREEDOM TO SING

THE GRAND (AND DIRTY) KO OLINA

THE HAWAII SUPERFERRY

THE MATING OF AOL + TIME WARNER

HOW TO PLUCK A BILLIONAIRE

LOST GENERATIONS

THE NATURE CONSERVANCY

PREDATORS IN PARADISE

THE PIRATES OF PUNALUU

THE PUNA CONNECTION

RICO IN PARADISE

 THE HARMON ARBITRATION

OFFICE OF THE U.S. TRUSTEE VS. HARMON

THE INDONESIAN CONNECTION

INVESTIGATING INVESTCORP

THE NESTS OF CB RICHARD ELLIS

THE NUCLEAR NESTS

PARADISE PAVED

THE QUEEN LILIUOKALANI TRUST

SONGS OF THE WHISTLER

THE STRANGE SAGA OF BCCI

THE VULTURES IN MAUNAWILI VALLEY

VAMPIRES ON GILLIGAN’S ISLAND

THE VAMPIRES ON JUPITER ISLAND

THE VULTURES ON GROVE FARM

VULTURES IN THE MEADOWS

THE WEINBERG FOUNDATION

YAKUZA DOODLE DANDIES

~ ~ ~


 

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Last Update December 26, 2009, by The Catbird