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The Honolulu Advertiser
Posted on: Sunday, August 5, 2007

COMMENTARY
Decisions made with sustainability in mind

By David Cole
Maui Land & Pineapple president and CEO

Hawaii news photo - The Honolulu Advertiser

David Cole Maui Land & Pineapple president and CEO.

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THIS WEEK

Editorial and Opinion Editor Jeanne Mariani-Belding puts Hawaii Housing, Finance & Development Corporation’s Executive Director Dan Davidson on The Hot Seat for a live blog chat Wednesday from noon to 1 p.m. at www.Honoluluadvertiser.com/opinion

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Have you checked out The Hot Seat? It's our opinion-page blog that brings in your elected leaders and people in the news and lets you ask the questions during a live online chat.

On The Hot Seat last week was Maui Land & Pineapple Co.'s CEO, David Cole. Below is an excerpt from that Hot Seat session. To see the full conversation, go to The Hot Seat blog at www.honoluluadvertiser.com/opinion and click on "On the Hot Seat: Maui Land & Pineapple Co.'s CEO David Cole." (Names of questioners are screen names given during our online chat.)

Christopher: Can you please explain why Maui Land and Pineapple continues to be a member of the LURF Foundation? Maui Land and Pineapple purports to hold the values of "malama 'aina, ecology and creating holistic communities."

With these guiding principles, I have difficulty seeing the association with LURF, which has quietly lobbied against most of the grassroots sustainability issues that have ever come up.

Perhaps with your company's leadership, you could take LURF in a more modern 21st-century direction?

David Cole: The Land Use Research Foundation has been around since the late '70s. In recent years, LURF's focus has become more development-related, although the organization also works with other organizations, such as the Urban Land Institute, Hawai'i Economic Association and the Hawai'i Farm Bureau Federation. One of the goals of LURF is to protect the rights of landowners who are also developers.

As we understand it, LURF has not lobbied, quietly or otherwise, against sustainability issues. In fact, LURF Executive Director David Arakawa has taken a position that is very supportive of sustainability initiatives.

If this not the case, perhaps we should be more engaged in a leadership mode and concentrate more effort another organization?

Kawika P.: What are you doing to address the community's concerns regarding some of your luxury projects on Maui? It seems to me that we cater way too much to the extremely wealthy who want to make Hawai'i their personal playground. That's a shame for local people who live here all year round.

Cole: We had a resort that catered to budget-minded travelers for too long while trying to pay fair wages to our employees in a high-cost local economy. The only thing riskier than renovating Kapalua Resort and moving up market, was not to renovate it. While we understand the emotional drive to cater to all income groups, occupancy and room rates had been sliding downward for years, and the company's depreciation schedules far outstripped investment programs. Our decision to do "luxury" projects was to support higher price points and margins for our ongoing operations. This in turn enables us to build projects like Pulelehua — focused on the housing needs of our local community.

John K.: I keep reading about a "sustainable" Hawai'i. With the closure of the cannery and your desire to develop at Honolua, when is enough, enough? And how can we say we want to push for sustainability without seriously stopping development and taking better care of our island environment?

Cole: I'll answer your cannery question first. We could not compete with low-cost producers in the Philippines and Thailand — so we exited the commodity canned pineapple business to have a shot at saving our fresh pineapple business, where we have far better margins and a distinctive market position. Ironically, because MLP is committed to trying to keep agriculture alive, we had to close our cannery.

Now your question regarding Lipoa and Honolua Bay. Our conceptual plans for Lipoa Point were designed with environmental benefits in mind after 18 months of consulting with a range of community groups. The area has been subject to dumping, vehicular trespass (and associated erosion) for years. So continuing "as is" is not an option.

The public review process worked the way it's supposed to — with many citizens coming forward with their concerns. We listened and have withdrawn our proposal and are now in discussions with Maui Mayor Tavares on some options that could improve the security and environmental integrity of Lipoa Point and the adjacent Honolua Bay.

Tina: It seems that Hawai'i has become very dependent on imported food. What do you feel can be done to reverse this? I think we should be more self-sufficient.

Cole: I agree we can and must become more self-reliant. We import about 90 percent of our food while over 500,000 acres of land formerly in production lies fallow. This does not make sense.

If you look at our local food market, we buy about $4.5 billion a year — divided evenly between visitors and locals. This means that less than 10 percent of the person food days buys 50 percent of the total food. In other words, there is a disconnect between our hospitality industry and local ag. If we pick one place to emphasize the purchase of local foods, it should therefore be connecting the hospitality sector with our farm sector.

Lisa: I am a little surprised that people aren't more supportive of homegrown ag. I try to buy produce that is locally grown because I'm not sure of the "quality" of foods grown in other countries, i.e., water quality, pesticides used on produce. Why do you think there hasn't been more support for homegrown foods?

Cole: We have the proverbial chicken-and-egg problem with many buyers (particularly resellers) where the idea of managing many supply relationships is a pain in the 'okole. Many buyers prefer to deal with a distributor who in turn simply calls forwarders on the Mainland for all their needs. No incentive for the produce department manager to take extra steps. This will change when the real-deal specialty food pros come to Hawai'i. Whole Foods Market will change the way the high-end food retailers behave forever.

Beyond the resellers, there are great farmers markets materializing, courtesy of Joan Namkoong and others. This is the best option for meeting local growers if you have the time.

Finally, there are folks like those at Town that are changing the way people view "fine dining" in restaurants — where local foods trump fancy sounding foods from far, far away.

Kaimana: Why do you think there is such little community support for your Honolua project, and what are your solutions?

Cole: There is mega aloha for Honolua Bay among conservationists, surfers, boat operators, tourists reading "Maui Revealed" and many, many others. Therein lies the problem with this special place — too many people loving it to death.

Also, Maui is at the end of a long economic boom. This is often the time when communities grow tired of any form of development. Although we had proposed an environmentally sound approach to managing Lipoa Point, the effort became emblematic of development in general on Maui. Thus, a lightning rod.

It is good to get the future of this place front and center with the electorate. Maybe a public-private partnership can evolve to take care of this place and many others that could suffer the same fate.

Mark S.: Hawai'i is a small group of islands in a very large ocean with little or no natural resources suitable to sustaining modern levels of consumption or lifestyle. We import very nearly everything and, as fuel costs rise, so do the costs of all products. Do you see any way that the economy in Hawai'i can continue to sustain the sort of "comfortable" lifestyle that we have come to associate with our island home?

Cole: The short answer is yes. By reconceptualizing our relationship to our natural resources and picking high-leverage import substitution opportunities, we can live well and sustainably.

For example, a healthy bio-fuels industry in Hawai'i can bring our people more energy security, new economic gains (via multiplier effect), new jobs, and an environmentally friendly industry that will allow our best ag lands to remain green (and re-charge our H20 lens) while diversifying our economy.

Ditto for import substitution on food calories, although not the same boost in terms of multiplier effect and maintaining "comfortable" lifestyle. No doubt, too, it would help to redefine "comfortable" to include more time out of our cars and offices.

Professor Don Eads: Do you see China as a major marketplace for Hawai'i tourism? Also, what can be done to decrease our trade deficit with China as Hawai'i business people?

Cole: China is one liberalized visa regime away from being a significant force in Hawai'i's visitor and real estate economies. The rise of incomes in China coupled with our long history of welcoming Asian visitors makes us a top future destination. However, we need an enlightened president to move this day forward.

On the question of the trade deficit: Get used to it. Low regulatory hurdles, cheap labor, and a hyper-entrepreneurial culture means that China will continue to get the lion's share of international trade (plus they are lending this money to continue our consumptive ways!). The "China Free" label that is beginning to emerge for some goods may restrain the loose regulatory environment, but the underlying cultural dynamics will continue to dominate.

IslandBiz: I want to say thanks for doing the Hot Seat and talking story with us. I read the article on you recently in Hawaii Business.

Tell us one thing about you that has not been written about that might be surprising, something that would give insight into what kind of a guy you are. Make it a good one!

Cole: My campaign poster for VP of the Associated Students of the University of Hawai'i back in the '70s showed me naked on horseback with the slogan: "Nothing to Hide."

There you have it!!