Savio to resell Ka'u land
By Andrew Gomes
Advertiser Staff Writer
Hawai'i residential real estate developer Peter Savio has reached an agreement to buy 6,000 acres of former Ka'u sugar land on the Big Island from C. Brewer & Co. Ltd. as part of a plan to sell subdivided fee-simple parcels to local farmers.
Savio said he signed a letter of intent with C. Brewer on Wednesday, and proposes to pay about $16 million for the property between Pahala and Wood Valley. He said he anticipates finalizing a contract in 30 days, and completing the purchase within six months subject to financing.
Alan Kugle, C. Brewer's chief executive officer of real estate, said he is impressed by the proposal. Many Ka'u farmers leasing property to grow a variety of crops are also encouraged.
Savio plans to divide and resell the property in parcels as small as 5 acres for about $5,000 an acre. The buyers would belong to a condominium association that would maintain roads and irrigation infrastructure.
Other plans include arranging collective purchasing, shipping, marketing and equipment sharing for farmers who buy property in the agricultural condominium complex.
"The idea is taking the advantages of a plantation and making them available to small farmers," Savio said. "Instead of being sharecroppers, they are going to be plantation owners."
Kugle said Savio's idea will be good for Big Island farmers. "It would be unique," he said. "I don't think it has been tried before only because of the way land has been held in Hawai'i (by big landowners)."
Anna Cariaga, a coffee farmer who leases about eight acres of C. Brewer property with her two daughters, said she's convinced the idea will work, but realizes there are challenges.
"It's really exciting and scary," she said, describing the feeling of buying property and taking out a mortgage to pay for it. "We have to try."
Savio has met with Ka'u farmers since March to gauge their interest, and said he's received positive feedback from 300 to 400 of them, including coffee and macadamia growers, herb and tea farmers and cattle ranchers. "It's good land," he said.
Existing tenants will have the first option to buy their leased property, followed by tenants interested in expanding operations, then other farmers and nearby residents, Savio said. He plans to hold a meeting next Friday to explain the process in more detail.
Savio made a name for himself buying leasehold apartment buildings and reselling units in fee to individual buyers. He said he first considered converting farmland into an agricultural condominium complex about two years ago when he tried to buy a piece of Kaua'i property that eventually was bought by AOL Time Warner chairman Steve Case.
The Ka'u property was part of the Big Island's last sugar plantation, which closed in 1996 after 137 years in business.
The 6,000 acres are part of 30,000 acres C. Brewer is trying to sell as part of a plan to liquidate all its real estate — 70,000 mostly agricultural acres on Maui and the Big Island.
Kugle said that in the last 12 months the company has sold $40 million of land, and currently has $44 million in land deals in escrow. Another $26 million in land is tied up in sale negotiations. If C. Brewer completes all ongoing deals, the company will have sold half of all its real estate.
Hilo-based C. Brewer, founded in 1826, is Hawai'i's oldest continuously operated business. But aging shareholders with estate-planning needs agreed to dissolve the company, and last year sold most of the firm's businesses, leaving only a few subsidiaries and land to sell.
Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.
