A&B sells former sugar land on Maui for $262M

Pacific Business New
By Janis L. Magin

Alexander & Baldwin has sold 41,000 acres of former sugar land that made up the Hawaiian Commercial & Sugar Co. plantation on Maui to a farming venture of California-based Pomona Farming LLC and Canada’s Public Sector Pension Investment Board for $262 million.

As part of the sale, the venture called Mahi Pono LLC also purchased Kulolio Ranch, A&B’s grass-fed cattle project; Central Maui Feedstocks, A&B’s energy crop project; and all of A&B’s diversified agriculture leases. A&B said it will also partner with Mahi Pono in the ownership and management of East Maui Irrigation Co.

Mahi Pono plans to cultivate “a broad range of food crops” on the land, including coffee, fruits and vegetables for local consumption and export, and plans to expand the beef project at Kulolio Ranch, Honolulu-based Alexander & Baldwin (NYSE: ALEX), said in a statement. Former Lt. Gov. Shan Tsutsui, who also served as a state senator representing Maui, worked as an advisor to Mahi Pono.

Ann Chin, president of Mahi Pono, said the group was “committed to sustainable agriculture.”

“With our purchase of this fertile land, we want to help ensure that Maui’s residents can produce agricultural products for future generations,” Chin said in a statement. “We want to expand Maui’s thriving and diversified agriculture industry. As we develop our plans, we will work closely with local stakeholders, including the agricultural community, our neighbors, government officials, civic leaders and the local community.”

All current A&B agricultural employees will be offered positions with Mahi Pono, both companies said. A&B closed the HC&S plantation at the end of 2016 after holding the last sugar harvest; nearly 700 workers lost their jobs with the closure.

“A&B’s commitment, when we made the difficult decision to close our sugar operations, was to team up with qualified farmers and transition these lands to a diversified agriculture model,” President and CEO Chris Benjamin said in a statement. “We acknowledged that this transition would take time, but could support the important goals of food and energy self-sufficiency for Hawaii, preserve productive agricultural lands, and stimulate new economic activity on Maui and in the state.”

A&B, which talked about diversified agriculture after the plantation closed, said it has held discussions with “hundreds of parties,” most interested in farming a single crop on the parts of the former plantation land.

Pomona Farming, based in Redwood City, California, says on its website that it “has significant experience farming diverse agricultural crops and managing cattle operations on over 100,000 acres” and lists such brands as Sunkist, Kraft, Maui Cattle Co. and MauiGrown Coffee as among its partners and clients. It appears to be affiliated with Trinitas Partners, a private equity company at the same address.

The Public Sector Pension Investment Board is one of Canada’s largest pension fund investment managers. The venture registered Mahi Pono LLC with Hawaii’s Department of Commerce and Consumer Affairs on Dec. 6; Mahi Pono LLC and Mahi Pono Holdings LLC were also registered with the state of Delaware on Nov. 28. Pomona Farming LLC registered as a Delaware company on Feb. 28, 2017.

“In Mahi Pono, we have found a unique partner with proven farming expertise, established marketing channels, strong financial resources, and a long-term perspective,” Benjamin said. “Most importantly, they share our vision of seeing farming flourish across Central Maui for generations to come. This could be one of the most important advances for agriculture in Hawaii in many decades.”

Gov. David Ige and Maui Mayor Alan Arakawa each said the deal is important for maintaining Maui’s agricultural industry and for creating diversified food production.

“As a farmer myself, I understand the challenges of the business,” Arakawa said in a statement. “Alexander & Baldwin has found the right partner in Mahi Pono to continue our island’s long legacy of farming, while providing new jobs and economic activity for our Maui residents.”

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