December 21, 2018
Alexander & Baldwin (A&B) announced it has agreed to sell the farmland associated with the former Hawaiian Commercial & Sugar Company to agricultural group Mahi Pono for $262 million.
Mahi Pono is a joint farming venture between California-based agricultural group Pomona Farming, LLC, and one of Canada’s largest pension investment managers, the Public Sector Pension Investment Board (PSP Investments). With a focus on making long-term investments in farming operations, Mahi Pono has extensive experience in cultivating diverse crops and managing cattle operations on more than 100,000 acres.
Under the terms of the deal, Mahi Pono will acquire 41,000 acres (64 square miles) of agricultural farmland located on the island of Maui, where it will continue to be used for the cultivation ofr crops including coffee, fruits, and vegetables for both the domestic and export markets.
As a result of the deal, Mahi Pono also will acquire A&B‘s grass-fed cattle project at Kulolio Ranch, and Central Maui Feedstocks – A&B’s energy crop project. Furthermore, Mahi Pono will assume all of A&B’s diversified agriculture leases, and will partner with A&B in the ownership and management of the East Maui Irrigation Company.
Stewards of the Land
A&B announced in early 2016 that after growing sugar on these lands for 150 years, it would be phasing out of production by the end of the year.
At the time, Chris Benjamin, president and CEO of A&B, told Big Island Now that the decision was made with “great regret”, saying, “We have made every effort to avoid having to take this action. However, the roughly $30 million Agribusiness operating loss we expect to incur in 2015, and the forecast for continued significant losses, clearly are not sustainable, and we must now move forward with a new concept for our lands that allows us to keep them in productive agricultural use.”
Today, with Mahi Pono taking the reins with long-term plans in place for diversified agricultural production to continue on the land, A&B has fulfilled their role as stewards of their legacy lands.
“While it is difficult to part with our legacy lands, we believe the most important thing is that they remain in active agriculture—to help feed our local communities, support our local farmers, and provide new economic activity and jobs for Maui and the state,” Benjamin said in a release announcing the sale. “Mahi Pono’s team has the expertise and capital necessary to make diversified agriculture a reality in Central Maui, but can justify the significant investment in infrastructure, equipment and staffing only if it owns the underlying lands. We considered many alternatives and believe this is the best path forward toward keeping these lands in agriculture and sustaining farming on Maui once again.”
A&B also worked to ensure that the next owner and future use of the farmland was also the best path forward for the island of Maui and the state of Hawaii.
“This transition represents a unique opportunity to advance diversified agriculture and increase local food production in Hawaii,” said David Ige, Governor of Hawaii. “With Alexander & Baldwin’s long tradition of stewardship and Mahi Pono’s investment, which is needed to cultivate new crops and preserve the environment, this partnership will ensure Central Maui stays green for the long term.”
“While many things have changed on Maui over the course of the past century, the majority of our residents want to retain the open space and rural character of Maui, and wish to see agriculture re-established on the former sugar lands in Central Maui,” said Maui Mayor Alan Arakawa. “It is important that we increase food security on Maui and in Hawaii, and having a farmer with a proven track record pursue diversified food crops here on Maui is definitely a step in the right direction.”
-Lynda Kiernan
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