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The Honolulu Advertiser
Posted on: Tuesday, July 16, 2002

Parker Ranch may sell some acreage

By Hugh Clark
Advertiser Big Island Bureau

WAIMEA, Hawai'i — The Parker Ranch may sell or lease some of its 225,000 acres to create an asset fund for its four beneficiaries, new chief operating officer David Houle says.

Houle, a former Honolulu banking executive, revealed his short-range goals last week in his first interview since taking over the day-to-day control of the 155-year-old ranch in March.

He intends to slowly convert land use to create a fund estimated at $50 million to $100 million over the next five years. His goal is to achieve more stability for the trust left after the death of Richard Smart. Smart's family ran the huge ranch for six generations.

Houle is trying to learn the ranching business quickly. He will not spell out which lands may be up for sale, beyond stressing there will be "no fire sale" and Waimea's vistas toward Kohala, Mauna Kea and Mauna Loa mountains will be retained.

Houle has been touring feedlots where Parker Ranch has cattle in four western states and in Canada.

Houle said he foresees a ranch by 2007 that will sustain about 18,000 head of cattle — 1,000 more than no. The ranch used to have 20,000 head but that was reduced because of a four-year drought that ended this year.

There will be more commercial and residential properties, fewer workers and more technology. There will be greater emphasis on tourism, including hunting for game and birds, but Houle foresees no hotels or restaurants for now.

Earlier this year, Parker Ranch bought out 29 of 70 workers in what was called a "voluntary separation" plan that netted workers various benefits depending on their tenure. Most will not be replaced.

Houle said neighboring ranches will join in some of the cowboy work and that the Parker Ranch will become more like a Mainland operation with greater use of three-wheel equipment and fewer horses.

Most workers, from the front office staff to cowboys, praised the plan offered in January.

Houle joined the ranch operation as CEO in March after nine years at Bank of Hawai'i as BOH chief financial officer. He was in Michigan before coming to Hawai'i.

Houle said he has not yet become an expert on the ranch history but stressed he answers to trustees. He said said he will serve on a year-to-year basis. "I serve at the pleasure of the trustees," he stressed, "I look forward to many one-year extensions."

Houle's plan is backed by the trustees, who want to generate more income for the trust's four beneficiaries.

The beneficiaries, chosen by Smart, are Parker School and Hawai'i Preparatory Academy, both private, in Waimea, the North Hawai'i Community Center in Waimea and the Hawai'i Community Foundation.

Houle's team is not yet in place. For now, trustee Tom Whitemore, who previously was an executive of First Hawaiian Bank, is continuing to oversee the completion of and the search for tenants in the new Parker Ranch Center, which is is partially opened.

Houle said there are two major players yet to be hired.

One will be a commercial manager. The other will be a planning-engineering specialist to replace Riley Smith who leaves the ranch July 31. Smith will join a new venture with Sandwich Isles Communications, which is building a multi-million-dollar communications system for Hawaiian Homes Land on Maui and the Big Island.

Houle said whatever happens he is looking to sustaining the livestock activities. About 10,000 steers are shipped four to five times each year from Kawaihae to Vancouver, Canada, where they are unloaded and then trucked to two Canadian sites as well as ranches in Oregon, California, Colorado and Texas.

Correction: Chief operating officer David Houle has been on the Mainland touring feedlots where Parker Ranch has cattle. The feedlots are not owned by Parker Ranch. A previous version of this story had incorrect information.