Rumours have been confirmed that Los Angeles billionaire David Murdock is indeed trying to sell Lanai Island in Hawaii, a high-value property that could reach into the hundreds of millions of dollars.
When it comes to the private islands of the rich and famous, rumours travel fast – it’s quite a feat, then, that Los Angeles-based entrepreneur David Murdock has managed to keep his Hawaiian isle out of the headlines. It was recently confirmed to the local media by ownership company Castle & Cook that Murdock’s island of Lanai is indeed available for sale, and suggestions have been made by those in the know that a deal may be close. The island is a true rarity – not only is it a vast 36,400 hectares, making it the sixth-largest in Hawaii, but it is also one of only two known private islands in the state.
According to media reports, the asking price for the island is said to be between US $500-$600 million. It might sound steep for a personal playground, but Lanai offers far more than just a tropical spot for rest and relaxation – it’s a functioning business empire unto itself. The island includes several Four Seasons resort hotels, two Jack Nicklaus-designed golf courses, and a population of more than 3,000 permanent residents, many of whom are employed in the island’s tourism.
Also known as Pineapple Island due to its unique shape, the large island was transformed from a fruit plantation into popular holiday spot during the 20th century. In the 1980’s, Murdock received a 98% share of the island through his acquisition of Castle & Cooke, which, among many other businesses, held the Dole Fruit Company under its umbrella. Seeing the potential that his gorgeous island held for tourism development, he built two large resorts, now managed by the Four Seasons, and drew in a plethora of celebrity visitors. Among them was Microsoft founder Bill Gates, who wed his wife Melinda on the island in 1994.
Maui mayor Alan Arakawa told a local paper that the 89-year-old Murdock was keen to sell the island due to its money-losing businesses and an inability to commit to a lengthy revitalization. “He has put a lot of money into the community, and he’s losing a fortune on operations, so he’s going to make business decisions,” he told the Maui News. “He is getting older, and it may be that he doesn’t want to be the one to have to concentrate on the long-term.”
While Arakawa says that an interested party may close the deal in the very short-term, international private island broker Farhad Vladi, who has sold more than 2,000 private isles, says that the composition of the island may pose a difficulty for the sale. He noted that the private owners of most of Scotland’s 8,000-acre Eigg Island, which came on the market in the 1990’s, ran into serious problems during the sales process with the island’s few hundred inhabitants, who owned 5% of the property.
“On one occasion, I was accompanying important clients around the island for a tour,” he recounted, “and some locals approached us, with a warning for the potential purchasers – should they buy the island, they would face conflicts.” Vladi said that his clients, of course, chose not to pursue the island. This happened several times before Eigg was eventually bought by a German artist – after he ran into the inevitable difficulties with the residents, the locals raised the funds to buy the island themselves.
Vladi said that while he and his client were lucky in how the Eigg Island sale eventually turned out, he learned how powerful the residents can be when determining the future of an island. “Lanai Island is, in some ways, a very different property from Eigg Island, with its hotels and other forms of employment,” he noted. “But in any case where an island has residents, it is always important to find the best possible marriage when making a sale.”
Maui’s mayor has also raised similar concerns – citing opposition from residents to a wind farm that resulted in the closure of one of Lanai’s businesses, he expressed fears that there would be the potential for conflict between locals and the prospective new owners. “…it’s very difficult to be confident that whoever is buying Lanai will have the same compassion as David Murdock,” he said. It will soon be known whether the interested buyers are willing to take on the challenge of dealing with Lanai’s residents – news is set to break on the sale in the next weeks.
Read more about this story: Maui News