Can Larry Ellison model the future on the Hawaiian Island of Lana’i?
When Oracle CEO Larry Ellison bought 98 percent of the Hawaiian island of Lana’i in June 2012 (for between $300 million and $500 million), shock waves rippled through the sleepy, picturesque backwater. The island’s 3,100 residents were long inured to the semi-feudal ownership structure—since the 1860s there had been a succession of lords of the manor, including pineapple king James Dole and, in 1985, billionaire David Murdock. But Ellison came in with even deeper pockets and bigger plans, guaranteed to change the face of the island, a place that proudly has no traffic lights, very few paved roads in 141 square miles and, as one resident describes it, “not just a slow pace—no pace at all.”
What a visitor will see now on Lana’i, 8 miles off the coast of Maui, is an old Hawaii that exists today only in patches on the larger islands. Locals still gather in the small, unassuming cafes such as Blue Ginger that ring Dole Park in the main town, Lana’i City, to gossip or “talk story” in the mornings. The scenery is so lush that golfers often take breaks to soak in the views. The powdery beaches, bordering waters dotted with sea turtles, are often completely deserted.
That will undoubtedly change if the projects now in discussion go forward. Ellison has researchers working on a desalination plant intended to increase the pumping capacity of fresh water to 10 million gallons a day from its present 2.5 million, and there are ongoing renovations at the two Four Seasons-managed hotels, the Resort Lana’i at Manele Bay and The Lodge at Koele, with a third luxury hotel under consideration.
Also on the to-do list: Expand compact, 1930s-era Lana’i City with its brightly coloured, plantation-style cottages and develop a university campus. Following Ellison’s purchase of Lana’i’s main air carrier, Island Air, a new runway and airport facilities are in the works to allow the first direct flights from the mainland. Oh, yes—and plans call for developing industrial areas, expanding solar power facilities, introducing electric cars and ultimately doubling the population to around 6,000.
Residents regard the planned rollouts warily. Many worry about preserving the character of the island. Says one resident, “A friend recently told me that whenever she goes to the sacred places her family showed her, she wonders how she will feel when there are signs pointing them out. The branding people have already been here asking how they should ‘sell’ the island. That’s a very uncomfortable feeling for us.”
The island’s introduction to Ellison has had some rocky moments, however. The first news of his plans came from a CNBC interview. “He was quoted as saying that he would use the island as a laboratory,” explains Robin Kaye of the community advocacy group Friends of Lana’i. “Many people were offended by that. We live here. We’re not animals in a study. I understand what he meant. But still… There was some sensitivity.”
(This story appears in the 07 February, 2014 issue of Forbes India. To visit our Archives, click here.)