Kane'ohe Ranch CEO is 'looking at opportunities' in Kailua
Interviewed by David Butts
Advertiser Staff Writer
Title: President and chief executive officer
Organizations: Harold K.L. Castle Foundation and Kane'ohe Ranch Co.
High School: Morgan Park, Chicago
College: University of Iowa, undergraduate and College of Law
Breakthrough jobs: Working with Marshall Goodsill at the law firm Goodsill Anderson Quinn & Stifel, and with Peter Ueberroth at Hawaiian Airlines.
Q. You were the chief architect of Victoria Ward Ltd.'s new entertainment complex. How do you feel when you see the crowds there on a Saturday night?
A. It absolutely blows me away. I cannot tell you the feeling I get when I go there. It's like, "Holy smokes, look at this." It came out beyond my wildest expectations. I can remember talking about, "Wouldn't it be great if we had a parking problem."
Q. You've been at this job in Kailua a year, and you are already shaking things up, most recently by proposing a multistory parking garage next to the Longs Drugs store.
A. I'm looking at the opportunities. I'm trying to create a dialogue with the community. I've observed that residents of Kailua want to shop at home, and most tell me that there is not enough opportunity to shop in downtown Kailua. Now, there are some people in Kailua that would like nothing to ever change. They love it the way it is. Change is really hard.
We own 46 acres in downtown Kailua. We are going to undertake a planning process where we look at those lands and determine what they want to be.
We need to interact with the community more before we say, "Here is the vision." I've been going to community meetings. (Reach me at) Mitch@kaneoheranch.com, by the way. (We want to get) people to say what would you like beyond "I don't want any change."
What starts to emerge is the desire for families (to be) together and a pedestrian community where you can leave the vehicles behind.
Q. What do you do about resistance that says we want to keep Kailua small? We don't want a three-story parking garage?
A. To lead, you have to listen. Good leaders are great listeners. So I need to listen to what people in the community are saying. It's not (about) overpowering somebody (and) doing it no matter what. One of the things people in Kailua are clearly saying is they don't want it to become a great big place. They value small merchants that are already in Kailua. I do, too. I know if we brought some different kinds of merchants to Kailua, the smaller merchants would be better off. I'll give you an example. If we brought a great six-plex theater to downtown Kailua, all the restaurants would have more business. If we brought four or five clothing stores, more people would come to Kailua.
As someone who runs a place for merchants and restaurants, my job is to bring people to the front door. The merchants' and restaurants' job is to get them inside.
Q. Your objective as a businessman is to increase revenue, right?
A. Very clearly, I'm about increasing cash flow. I'm about increasing cash flow for the family that are the owners (of the foundation). I'm about increasing (cash flow) for the foundation, so they can do good things in the community.
Q. And is the route to that having more people shop here more?
A. That's a route. I believe the value of our land would increase if we create a cool place that would keep people in Kailua home shopping here rather than going over the Pali, H-3 or Likelike and shopping in other places.
The scale (in Kailua) is different. Kaka'ako and Ward is an urban place. ... It's a lot more intense. Bigger things work there. Kailua is a town in the country, smaller, more casual. It's slippers, shorts and T-shirts or aloha shirts. But it can be way better, too.
Q. Aren't people going to see you as having a final end in mind when you go to these meetings? You've got to increase that cash flow.
A. There's two ways to do that. One way is to invest somewhere else. To date, I've had one decision to make and I bought land on the Mainland. What I'm struggling with about downtown Kailua right now is, should we invest foundation money in downtown Kailua or should we invest somewhere else? I don't think it's responsible to invest without adequate parking.
Q. If your plan for Kailua doesn't seem to be moving forward, what will you do?
A. We can invest in other places. We have other alternatives. I have a hunch that making downtown Kailua into a better place can create enormous value because the demographics of the residential community adjacent to Kailua are very strong. There is significant disposable income here.
Macy's had a decision to make about whether to extend their lease or not. They looked at the demographics and decided to extend for 10 years. I want to build enough of a community around our Macy's store that Macy's won't even think about it 10 years from now.
Q. The population of Kailua is about 50,000. Do your plans involve growth in that population?
A. At the present time, not in meaningful numbers, no. I'm really looking at serving the population that's here rather than growing the population. That's a gigantic community issue and, after sticking my head in the hornets' nest of the parking structure, I don't care to stick my head in the hornets' nest, which is a bigger hornets' nest, of how many people should live in Kailua. That's a community process that's up to the City and County of Honolulu.
Early at Ward, Herb Cornuelle from Campbell Estates said to me, "Young man, it's dangerous to own land in a democracy." I said, "Mr. Cornuelle, why is that?" and he said, "Because you only have one vote."
We do not need to grow the population of Kailua to be a success from a cash-flow point of view. I think it would be really cool to have residents living in downtown Kailua. I think a limited number of loft apartments above the commercial or above the offices would be a good thing.
Q. The Castle Foundation hands out about $7 million a year. What do you look for when considering where to give money?
A. I look for leadership in the organization. I look for a board that I trust. I want to be able to believe that organization can do what they say they can do when we make a grant.
We would like to try to make a difference in public education reform and enhancement. We would like to try to make a difference in near-shore marine resource conservation.
Q. You were chief operating officer at Hawaiian Airlines before their first bankruptcy. Do you think the airline is going to come out of bankruptcy successfully?
A. I think Hawaiian Airlines is going to be OK because of its people. I think it would be a tragedy to break up that team. An asset that is not on the balance sheet is the skill of that team.