Pratt brought back to run Grove Farm

Pratt, 65, will serve as president and chief executive, positions he left in 1996 after 20 years.

Pratt returned yesterday to his old office in the venerable Grove Farm Building in Puhi, finding a company vastly different from the troubled one he left five years ago.

Today it is a smaller firm, shrunk to just eight paid employees from the roughly 150 when Pratt retired. The operation of its quarries, its shopping center and most of its other activities have been contracted out.

But it also is in financially better shape, thanks to a new owner who will help underwrite the $13 million renovation of its Grove Farm Shopping Center and the rehabilitation of the company as well.

Pratt’s appointment was announced by Honolulu lawyer and Grove Farm board chairman Daniel H. Case, whose son, Steve Case, chairman of AOL Time Warner, owns Grove Farm. The stockholders of Grove Farm, most of them members of the Wilcox family, agreed to sell the company to Case on Dec. 1.

Daniel Case knows Grove Farm. He was born on Grove Farm land, where his father worked early in the last century as chief financial officer. And he and his law firm have done legal work for Grove Farm. Now, the Pratt appointment also provides the Case family with a wealth of corporate memory of the company’s operations.

"We welcome David, with his proven record and unique qualifications, back to Grove Farm," Dan Case said yesterday.

Pratt said he was busy reacquainting himself with the company and could not comment on any possible business initiatives.

Steve Case’s choice

The Pratt and Case families have associations that go back a century. Beyond the Grove Farm connection, Dan Case and David Pratt’s father once served together in the Honolulu law firm where Dan Case is now senior partner.

Pratt was trained in the sugar business, but helped lead Grove Farm out of cane and into retailing and other operations in the 1970s and ’80s. A major venture into land development went sour with the devastation of Kaua‘i’s real estate market by Hurricane Iniki in 1992. That left Grove Farm with huge debt and little income, and helped also lead to Pratt’s departure in 1996.

Pratt was replaced by a board member with development experience, but when the island’s economic recovery was slower than expected, Grove Farm continued to falter.

While he left the Grove Farm presidency and its board, Pratt was never far from the firm. He lived two miles from the office building. He served for a time in retirement as chairman of the board of Wilcox Hospital, founded by members of the Wilcox family that also founded Grove Farm. And Pratt’s son Bill, a Wilcox heir through his mother, served on the Grove Farm board.

The company’s board during the past two years had considered several buyout proposals, each of which was rejected until Steve Case came forth. He offered more money than any of the previous suitors, but also provided — because of the Case family connection to Grove Farm — a form of continuity that was important to some Wilcox family members.

By the time Case took over the company, the debt — held roughly equally by First Hawaiian Bank and Bank of Hawaii — had increased to $61 million, and its signature shopping center needed significant renovation.

Cost may be $101 million

Steve Case’s total cost for Grove Farm appears to be about $101 million — the $26 million he paid for stock, the bank debt, and $14 million he has committed to spend on the shopping center and to finance required water development for the company’s Puakea residential project.

For that, Case acquired 22,000 acres of south Kaua‘i real estate with a partly developed master-planned urban area and golf course between Lihu‘e and Puhi.

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