Going, going — now it’s gone
KAHULUI – The $23 million fresh fruit processing line that three years ago was supposed to represent the new future of Maui Pineapple Co. was auctioned Tuesday for $125,000.
"It’s so specialized," said Maui Land & Pineapple Co. President Ryan Churchill, noting that there weren’t likely to be a lot of buyers for the equipment.
More than 300 bargain hunters and looky-loos crowded the Elleaire Ballroom at the Maui Beach Hotel for an all-day extravaganza of hope that kept three auctioneers chattering in relays, as many more bidders were online, following the action from around the world.
ML&P closed down its Maui Pine subsidiary at the end of last year, selling or leasing some of its land and equipment to Haliimaile Pineapple Co. But the unwanted leftovers went on the block Monday, ranging from wrecked golf carts to never-used office equipment to a generating station that could power a city of 50,000.
It was a day when the complete newbie could go head to head with the experienced auction-goer and come away a winner.
Like Becky Woods, chief executive officer of Maui Economic Concerns of the Community, which runs Ka Hale A Ke Ola and other island homeless shelters. She noticed pictures of golf carts on the front page of The Maui News on Tuesday morning and decided to check it out.
"I need golf carts," she said, for maintenance workers at the organization’s 28-acre Waiale Road shelter. And vans.
But Woods had not known about an inspection of the items Monday, so she had not had a chance to look them over.
"I’m afraid to bid," she said at the start. "You don’t know what you’re getting."
But she plunged in, and on just the fourth lot of the morning, she bid successfully for two carts, at $2,000 each.
The real price was $2,200, because of a 10 percent buyers premium (13 percent for online bidders).
Pictures of the items were projected on a big screen. The catalog noted obvious defects, like "engine problems" or "no brakes" or "no key." But the terms were where-is, as-is and the buyer had to remove the prize – no small matter if the prize was a 20,000-gallon diesel fuel tank set in concrete.
By lunchtime (a free buffet for bidders), Woods had acquired three golf carts, two vans for $9,000 and $10,000 (really $9,900 and $11,000) and two defibrillators. "Amazing," said Woods after buying the second van. That was it for her.
Pawnbroker Richard Dan, who attended in person for about an hour, went back to his offices and followed the bidding online.
"I see auction fever pulling a lot more money out of the live bidders," he said. Items that had mostly online interest seemed to bring less.
From his office, he was able to use the Internet to compare auction prices with national used equipment prices. He thought some Internet bidders were doing very well on specialized laboratory equipment, while he thought the live bidders were paying too much for used office equipment.
When Maui Pine closed its cannery in August 2007, that auction fetched around $3 million, and half of that was for new tinplate, which brought close to market prices. In other words, a lot of things that were costly when new were sold for very little, in many cases for only scrap value.
Most people probably would not guess how many forklifts ML&P had, but it had dozens and dozens. They went for low prices, compared to new, in 2007, and they went for low prices Tuesday.
Joe Teipel of Real Estate Auctions Hawaii, who was spotting bidders for auctioneer Mark Weitz of Great American Group of Woodland Hills, Calif., said there were so many forklifts, they depressed the market. If you had wanted a forklift, you could have had a wide choice for between $1,000 and $2,000.
The auctioneers had obviously had high hopes for the fresh fruit processing line. Everything stopped for a few minutes to survey the buyers to see whether they wanted to bid on the whole thing or as individual sections.
Selling it as a single unit was the choice, but the bidding was tepid and soon ended. "Unbelievable," breathed Teipel when the hammer fell at $125,000 – about $141,000 with buyers premium.
There was considerably more interest in the four generators that ML&P had installed to run the cannery and Queen Ka’ahumanu Center, which it then owned. The diesel generators cost a couple of million dollars apiece when new and are the kind of industrial equipment that ought to last a long time, although ML&P Chief Financial Officer John Durkin said one of the four was "for parts."
In this case, there was a different approach. The generators and some associated equipment were sold individually, with not only local and online interest, but one bidder on the telephone with Weitz.
There was a proviso, however. After the auction, the individual lots were totaled up and 10 percent was added. That came to $450,000, and if anyone wanted to start at that price for the whole shebang, the auction would be reopened. The reopening stopped where it started, the whole generating station sold to a single, unnamed buyer for $450,000, not counting the buyers premium of $58,500.
Weitz estimated that with 600 lots, it would take "all day" to complete the sale.
People wandered in and out, socializing, drinking coffee and eating, while the relays of auctioneers kept moving the lots along at the rate of about one a minute. Some lots brought $450,000 and some brought $50.
Mark Rooney, who was attending sustainable agriculture classes at University of Hawaii Maui College, came over to watch. He was sad to see local agriculture taking another hit.
He also was amazed at how quickly Maui Pine went from hope to collapse. Three years ago, when the new fresh fruit processing line was installed, Rooney attended an open house held by the company at its cannery.
"It doesn’t seem like it was only three years ago," he said.
Rooney wasn’t planning to bid on anything.
"These auctions are the only time on Maui when gambling is legal," he said. "A guy could get deals or get whipped into a frenzy" and end up overpaying.
Likewise with buyers of the company’s stock. ML&P was the second leading gainer on an up day at the New York Stock Exchange, rising $1.64 to $7.34 on light trading of 144,000 shares.
It was the highest the stock has been since August and far above the $3 a share it sold for in February.
Durkin said investors had been calling him all morning, but he had no idea what was behind the Wall Street interest. Some callers mentioned the auction, but he said it shouldn’t have moved the stock price.