The Maui News
Sunday, April 19, 2009
By CHRIS HAMILTON, Staff Writer
WAILUKU - When the company that owns the Molokai Lodge closed the boutique hotel about a year ago after a heated dispute over more development on the Friendly Isle, many local residents thought it was just too nice a place to keep boarded up for very long.
They were wrong.
The company, Molokai Properties Inc., or Molokai Ranch, has also kept shuttered its Kaupoa Beach Village and the Kaluakoi Hotel, as well as its rodeo arena, movie theater, restaurants, golf course, gift shop and gas station.
The closures put 120 residents on this island of 7,500 people out of work. And today, Molokai has the state's highest unemployment rate, at 12.7 percent, about twice the state average. However, state labor experts and politicians said Molokai's situation can be deceiving, considering it is one of Hawaii's few remaining rural communities.
Former ranch employees said they fight to make ends meet, and also to deal with the stress and boredom of joblessness. But residents also said they haven't lost their can-do attitude, good nature and community spirit.
Gov. Linda Lingle created a Molokai Action Team as soon as the ranch announced it would cease operations as of April 5, 2008. And while state and county agencies helped people navigate welfare, health care and other programs, they have yet to come up with a long-term solution for Molokai's unemployment problem.
Molokai, though, appears to have displayed different priorities than other Hawaiian islands. For years now, residents have successfully resisted attempts to dramatically expand tourism and development on Molokai; and the more widely discussed ideas for the future revolve instead around farming, education and renewable energy.
"We're unsure right now of its immediate future, but Molokai is very resilient," said state Sen. J. Kalani English, whose district includes Molokai. "And the island can go through quite a bit and still have a fully functioning society. That's what they have. They are survivors."
Extended families have closed ranks, so that, while a couple family members work to bring in a steady paycheck, the rest may supplement the group's diet with traditional fishing, hunting, gardening, gathering and sharing, English said. It's subsistence living. It's the Molokai way, he said.
"So maybe this may be a difficult time for Molokai, but they have more options than Hawaii's urban areas have," English said.
State Rep. Mele Carroll, whose district includes Molokai, said the full effect of the ranch's closing may not be felt for a while because former workers have unemployment insuranceuntil the end of this year.
Carroll said she hears more complaints about possible Young Brothers' shipping cost hikesto Molokai and the Molokai Properties' proposed utility rate hikes than a lack of jobs. She's worried aboutthe impact on small businesses.She said she's concerned about thepeople butadded that they are hardy folkswho are used to hardship and finding creativeways to remedythis kind ofsituation.
"This isn't the first time Molokai has been through this," she said,noting the pineapple plantation closings and loss of other resorts and businesses over thelast few decades.
Molokai Properties reportedly lost almost $40 million this decade. And after losing support for plans to build hundreds of luxury homes above Laau Point, company officials said they were forced to close all its Molokai operations.
Recently, Molokai Properties drew more public ire when it asked to further raise water utility rates, after being blocked by the state from carrying through with plans to abandon the company's utilities, which serve about 1,200 island residents.
Critics call the company vindictive, especially considering the island's struggling economy, where tourism, like the rest of the state, has dropped by double digits.
Still, many residents say they don't regret their decision to oppose development at Laau, and stand by their argument that Laau Point is a sacred site and essential to subsistence living. People distrusted the company to hold up its end of the bargain for the development, and maintained that the influx of wealthy folks would have altered forever the island's low-key character, they said.
A year later, some people on the other side of those arguments continue to blame Laau opponents for the island's unemployment and the ranch closing, including Republican Oahu state Sen. Fred Hemmings and Molokai Properties Executive Director Peter Nicholas.
"My friendships with many of the wonderful people of Molokai are deep and enduring, hence my aloha for them, but not for the handful of malcontents that are destroying many good lives on Molokai," Hemmings wrote in a recent opinion piece.
English, a Democrat of Hawaiian heritage, said Hemmings wrote the op-ed after he put his foot in his mouth.
English said the two got into a heated exchange after the Kailua senator used negative stereotypes to describe Native Hawaiians on Molokai during a recent hearing at the Legislature. English, who later said he was too upset to remember exactly what Hemmings said, wrote his own op-ed piece critical of Hemmings, and in an interview last week, called Hemmings' comments "classic bigotry."
In his op-ed, Hemmings replied to English by saying that Molokai deserves "honest help" because almost one-third of the population receives state financial and food assistance, 59 percent of children are born "out of wedlock," and the unemployment rate is so high.
But English said that the percentages don't tell the true story on Molokai, which has its own unique set of socioeconomic circumstances and history to Hawaii.
Department of Labor and Industrial Relations spokesman Ryan Markham said considering Molokai's small population and rural economy, while the percentage appears high, the unemployment rate really represents only a small number of people who are out of work.
"Our staff there tells us they've been very busy with unemployment claims, and say it (the lack of jobs) has been difficult for everyone," Markham said. "But they also say that the people are handling it very well and seem to be in good spirits."
Hawaii's statewide jobless rate is above 7 percent for the first time in more than 30 years and double what it was more than a year ago. On Molokai, roughly 300 people are unemployed out of the island's 2,500-person labor pool.
That's about how many people were unemployed in 2001 after the Kaluakoi Hotel closed.
However, it's difficult to determine exactly where Molokai's unemployment rate comes from, state officials said. Like most places in Hawaii, it's a job cut here and another layoff there on Molokai, they said.
The problem can't necessarily be laid exclusively at the feet of the ranch closure, experts said. The entire island has struggled economically since the last of its pineapple plantations closed about 20 years ago, and the number of hotel rooms on Molokai has declined over that time in a competitive Hawaii tourism market.
Meanwhile, out of the 98 ranch workers referred to the state's work force development program, 51 have since found employment, said Molokai Action Team Chairman and state Planning Director Abbey Mayer.
Mildred "Millie" Hirose was a Molokai Lodge housekeeper for 11 years until she was laid off. Hirose, 59, is among those still unemployed.
"I'm making ends meet," said Hirose, who lives with her retired husband and grown son and daughter. "We are struggling here, but we manage."
Hirose said they live off of her unemployment insurance, her husband's Social Security and her daughter's job as a school janitor. She tried moving to Maui for work but couldn't find a reliable job or afford to maintain two residences.
To pass the long days now, she has hobbies, volunteers and takes care of her baby granddaughter, she said. And, of course, she hunts for a job.
"I think Molokai is in a different situation because we are smaller," Hirose said. "Our size has limited the number of jobs on Molokai."
She said some of the remaining businesses have either closed, cut staff or reduced their employees' hours because of the cyclical effect of a down economy.
Mayer, who was also integral in setting up the controversial master plan for Laau, said that the state Action Team hasn't met in a few months now. But they are still working to put in place long-term solutions that fit Molokai's independent culture, Mayer said.
Molokai Community Service Council Executive Director Karen Holt compared today's economy to the environment after the Kaluakoi Hotel closed, when people worked to diversify the economy.
"This island has always said it wants to be the breadbasket for Hawaii," Holt said. "We're not a wealthy island. We just want to be able to take care of our home."
The state is encouraging Oceanic Institutes, a nonprofit affiliated with Hawaii Pacific University, to move ahead with an idea to build a fish hatchery on Molokai, Mayer said.
The Action Team also is coordinating a series of environmental efforts to mitigate erosion on the island and prevent further damage to the south shore's fringe reef as well as making repairs to Palaau State Park. Mayer said he was unsure how many jobs the solutions proposed to date will create.
"I think it's always been historically a challenge to create employment opportunities on Molokai," Mayer said. "But with the closure of the ranch, it's even more limited.
"And any bigger effort to create employment still meets a fair amount of disagreement in the community about what plans to pursue. I think getting people to agree is one of the long-term challenges for Molokai. The closure of the ranch is a perfect example."
He said that opposition managed to reject an incredible deal from the company.
In exchange for 200 luxury homes on 2-acre lots, the company would have built 1,100 affordable homes on 500 acres of ranchland and renovated Kaluakoi Hotel - with more jobs. In addition, 51,000 of the company's 60,000 acres, or one-third of the island, would have been placed forever in a land trust for conservation or agriculture.
"If the people won't accept that, it's hard to tell what else would be accepted," Mayer said. "The hope, though, is that the island will be able to rebuild in a way that's acceptable to everybody."
The company's environmental study of its Laau plans was deemed incomplete because it didn't fully address key issues, such as water access rights. Technically, Laau could still resurface before the state Land Use Commission, perhaps when the national economy improves.
Molokai Properties spokesman Daniel Orodenker declined last week to discuss the company's long-term plans for Molokai.
Holt said a grass-roots community group she's involved with has offered to accept the company's water and wastewater utilities as part of a $150 million sale of Molokai Ranch land. The community, outside financiers and philanthropists joined with First Wind, a wind farm company, to put together the offer, which the company has rejected as insufficient.
In the past, the company has said its Molokai assets are worth at least $300 million. Nicholas, in testimony before a state House committee a month ago, indicated for the first time that Molokai Properties would consider selling "property at an acceptable price."
Holt's organization provides social services to children and families, such as early childhood, after-school, family support and economic development programs. One of their recent successes is a popular new farmers market.
"Life's OK here," she said. "People have cut back on their spending, and their unemployment benefits have not expired yet. We have not seen an increase in crime or homeless. It's not an easy life, but the people who are of Molokai are finding ways to make ends meet."
Currently, Lingle is working to convince Molokai Properties and First Wind to come to some sort of compromise to at least lease the land for a massive wind farm that would supply clean, renewable energy to the island and Oahu.
Singapore-based GuocoLeisure Ltd. owns Molokai Properties. GuocoLeisure is an investment company that owns hotels and casinos across the world. It showed a $56.7 million profit for the last fiscal year due mainly to its Australian gas and oil business, according to its 2008 annual report.
But the current state of the company is less clear. About a month ago, GuocoLeisure's stock price hit a 52-week low, selling for 22 cents a share on the Singapore Exchange. That's down from about $1.75 a share two years ago, back when Laau was still on the horizon and before the global tourism industry dropped off the table.
No one answered the phone recently at Molokai Properties' Honolulu office. A voice-mail message still makes reference to Molokai Ranch and refers customers to a toll-free line to make reservations for the villas and lodge, both of which have been boarded up and empty for a year.
"It's a ghost town over there," Hirose said of the former company town of Maunaloa. "There are weeds growing everywhere, and I hear from my friends that people are moving away."
* Chris Hamilton can be reached at email@example.com.
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