Profits rise despite drought, economy After a rough 2008, much ground regained Wise investments offset losses
After two years of multimillion dollar losses, Parker Ranch Foundation Trust made money last year and now wants to raise more by hosting special events at its Waimea rodeo arena.
Revenues and net assets were up in 2009, while operating costs were reduced by the trust, which owns Parker Ranch, one of the nation’s oldest and largest cattle ranches.
However, cattle sales remained in the red, while several other income sources were down in 2009 compared with the prior year, according to the trust’s recently released 2009 annual report.
“Global events have continued to raise uncertainty about the economic outlook, and the drought in West Hawaii has exacerbated the local challenges for the Big Island ranching community,” the five trustees wrote in the document. “Nonetheless, Parker Ranch Foundation Trust has accomplished a great deal during the last year.”
Chief among them was going from an $18 million operating loss in 2008 to a $5.1 million profit last year. That financial turnaround helped boost total assets to $283.8 million by year’s end, up $5 million from the close of 2008.
During that period, Parker Ranch saw its revenues jump to $19.4 million from $3.5 million, largely due to investments.
“The Trust restructured its debt in 2009 in a most favorable manner, and while the investment market remains volatile, there has been a significant recovery since the 2008 market meltdown,” the trustees add in their annual message.
That slumping market caused the trust to post investment losses of $13.2 million in 2008, while its activities last year produced a $7.5 million profit.
Trust Chairman Michael Gibson did not return phone messages left Monday and Tuesday.
Parker Ranch slashed the cost of its cattle operation by nearly one-third, but still lost $286,0000, according to the financial report.
Interest earnings, timber and aggregate sales, and rental income all dropped last year, compared with 2008.
The trust collected $1.1 million from land sales, which largely involved the liquidation of Parker Ranch Realty, while the value of its vast land holdings of more than 100,000 acres increased by $3.2 million.
Although cash reserves dropped to $2.8 million from $4.1 million, the trust loaned $3 million to North Hawaii Community Hospital, one of its four beneficiaries.
It also just completed the sale of 3,509 acres of North Kohala property for $49.3 million, according to Hawaii County property tax records.
Although those proceeds will be reflected in the forthcoming 2010 annual report, the trust committed to giving $2 million annually to its beneficiaries, starting this year.
Hawaii Preparatory Academy, the Hawaii Community Foundation, and the Parker School Trust Corp. are the trust’s other beneficiaries.
Parker Ranch has proposed spending up to $100,000 on improvements to its rodeo arena, headquarters and maintenance baseyard, all of which are located about one-half mile from Waimea and mauka of Mamalahoa Highway.
It wants to make offices available for businesses not associated with the ranch, offer warehouse space for storage, vehicle maintenance or similar light-industrial uses, and allow the rodeo arena to be used for special events.
The added revenue would help stabilize ranching activities and make better use of underutilized facilities, Parker Ranch states in its application for a special permit needed to do those uses on 13.9 acres spread among two parcels.
County Planning Director Bobby Jean Leithead Todd has not yet issued her recommendation to the Leeward Planning Commission, which is scheduled to consider Parker Ranch’s request at its 9:30 a.m. meeting Wednesday in Kailua-Kona.
“Being proximate to the commercial core of Waimea Village and yet not too close to existing residential areas, the applicant believes that the requested uses would fulfill an important land-use need in an area that should not generate any significant impact on neighboring areas,” Parker Ranch states in its application for a special permit.
At least one neighboring landowner has disagreed with that claim, however.
Nathan and Cheryl Hirayama, who live across the highway from the rodeo arena, are seeking a contested-case hearing, which a court-like process that allows parties to present evidence and witnesses to support or oppose a land-use request.
In their petition for standing, the Hirayamas wrote that Parker Ranch has allowed concerts and other nonequestrian events to be held at the rodeo grounds. They complained that attendees left litter on their property and caused damage, which if repeated, could compromise their farm.
The seven-member commission will determine whether to hold the requested contested-case hearing.
Parker Ranch has told the county the upgrades would take up to four months to complete, which would allow the arena to be made available early next year.