Everything You Need To Know About Lanai – Larry Ellison's $300 Million Hawaiian Island

By on March 23, 2015 in ArticlesEntertainment

Oracle founder Larry Ellison is a billionaire 52 times over. As of this writing, he is the fifth richest person in the world, behind Amanio Ortega Gaona, Carlos Slim Helu, Warren Buffett and Bill Gates. For a guy like Ellison, dropping $300 million to own 97% of the Hawaiian island of Lanai is pocket change. Since he purchased the island in 2012, Larry has proven himself to be a pretty amazing benevolent leader. This is, of course, the man who was once called a modern day Genghis Khan. For Chrissakes, his biography is called "The Difference Between God and Larry Ellison." With an ego that size, you expect him to move in and take over, right?  You can probably picture him collecting rent from each and every inhabitant of his island while being fanned by girls in bikinis. And while he does collect rent from most, it is what he is doing with that rent and the island in general that is pretty amazing.

Lanai has been best known throughout history for its pineapple production. It is one of the smallest and least visited of the Hawaiian islands. It is a quiet place of astounding beauty with Cook Island pine trees dotting the landscape. The island was under the control of nearby Maui, dating back to before recorded history. It is believed its first inhabitants arrived in the 15th century. The legend of the island is that a Mauian prince named Kauluāʻau was banished to the island for his wild behavior. The island was believed to be haunted. Kauluāʻau chased away the demons and brought peace to the island.

lanai

Hawaiians lived happily on Lanai for around 800 years. Then, in 1861, a group of Mormons led by an opportunistic con man named Walter Murray Gibson arrived. Gibson built a Mormon colony in the island's interior and then began buying up land until he controlled nearly the whole island. He bought the land with the church's money, but put the titles in his name. When the Mormons got wind of his scam, they excommunicated him, but allowed him to keep the land. After his death in 1888, the land passed to his heirs and through other owners, but no one could quite figure out what to do with it. They tried sheep ranching. They tried growing sugar cane. One crop that did grow very well was pineapple. This caught the attention of a young Harvard grad with a fledgling pineapple company on Oahu, named James Drummond Dole.

1

In 1922, Dole paid $1.1 million for the land and just like that, an entire island was taken over by Dole pineapple. Dole plowed the island's interior into fields, built roads and a harbor, and laid out a quaint town in the center of the island with Dole Park in the middle. The park was surrounded by plantation style cottages to house the workers in his pineapple fields. By 1930, nearly all of the island's 3,000 residents were Dole employees. The island exported 65,000 tons of pineapples each year. Dole had gardeners care for his employees' lawns and built a golf course. Dole's motto was "Have happy workers, grow better pineapples." Life on Lanai was good.

By 1992, overseas production of pineapples had driven down prices and Lanai could no longer compete and got out of the pineapple business. The island was sold to California billionaire David Murdock, who turned the island's focus to tourism. He built two major resorts – the first developments on the island since Lanai City – and contracted the Four Seasons to run them. Lanai was still a company town, but instead of pineapples, they were now in the hospitality and tourism business.

seasons

Murdock's bet on tourism didn't pay off and he was hemorrhaging money – as much as $20 to $30 million a year – to keep the island afloat. By the mid-2000s, he started cutting back, laying off large numbers of workers and abandoning the maintenance of the island. Buildings quickly fell into disrepair and the island looked like it had been left to die out.

By the summer of 2011, Murdock told the editor of the island's newspaper that buying Lanai had been "the poorest financial investment I've made in my entire life." He put Lanai up for sale. Residents worried that Lanai would sell to multiple owners, or that a big resort developer would move in and destroy the character of the island. Two particularly panic driven rumors were that a Russian oligarch or a Sheikh would buy their island.

Instead, Oracle founder – and fifth richest man in the world – Larry Ellison purchased Lanai.

Lanai City is still where nearly all of the island's roughly 3,200 residents live. Ellison owns 1/3 of their homes, the island's two Four Seasons hotels, Dole Park – the central common square at the art of the city, and all the buildings around it. He also owns the community center, the town swimming pool, the theatre, the grocery store, two golf courses, the water company, a wastewater treatment plant, and the island's cemetery. He owns 87,000 acres of Lanai's total 90,000 acres.

ellison

All of that was part of Ellison's original purchase. He went on to buy an airline that would connect Lanai to Honolulu. Of all the properties and businesses on the island, only a handful are not owned by and don't pay rent to Ellison. This includes the gas station, two banks, a credit union, the rental car company, and a café called Coffee Works.

One would imagine that Ellison has grand plans for the island. Perhaps his own private resort or a playground for himself and his rich buddies? If that was the case, would the island's Catholic Church be sending up heavenly thanks for Ellison? Reportedly, the priest regularly includes "blessings for Mr. Ellison, particularly, and those who work with him, that all the good plans and intentions that he has for Lanai be fruitful."

Ellison has enormous plans for Lanai, which he runs through an executive team for the company created to execute his plans – Pulama Lanai. Ellison is building a third resort. This one will be located on the as yet uninhabited southwestern coast. He's also building a complex of 50 private estates of five or more acres each. He is planning to expand Lanai's airport so that it can accommodate direct flights from the mainland for the first time in the island's history.

Lanai's growth has been limited by a lack of enough water for a larger population. Ellison is building a state-of-the-art desalination plant to produce more fresh water.

He plans to expand Lanai City and build an energy park where solar panels or photosynthesizing algae would create electricity and feed it onto a new smart grid.

Ellison plans to bring commercial agriculture back to Lanai. His fields will have sensors to control fertilization and irrigation, allowing Lanai to begin to feed its own population and eventually even export products. Currently, and for as long as anyone can remember, Lanai has had to rely on weekly food shipments arriving from Oahu via barges.

gold

Ellison hopes to see the island's population grow to 6,000. There has been some talk of flower farms and organic wineries. There are plans for a sustainable fishery using aquaponics and hydroponic to raise not just fish, but also grow fruit and vegetables.

Ellison is bringing better healthcare to the island. There's a bowling alley, a 22-acre film studio, and a residential tennis academy for competitive kids.

Ellison is renewing and refreshing every part of not just the island, but life on the island.

Also as a result of his plans, after several years of crippling unemployment, the citizens of Lanai were back at work. Just four months after Ellison's purchase of Lanai, unemployment was down to 1.2 percent.

golf2

Ellison started a summer program for kids and another to help high school students land college scholarships. He screened "Frozen" in Dole Park. A Nobu restaurant opened at one of the hotels. The community pool offers free aqua aerobics classes, Pilates, and ukulele lessons. The local high school has a football field so that, for the first time in school history, they can host home games.

Ellison has been empowering the locals on Lanai to open their own businesses. From farms, to juice bars, the residents are taking Ellison up on his recommendation. In fact, Lanai's new juice bar sits at one corner of Dole Park.

Ellison also started an animal rescue center where 380 cats live. The cat population on Lanai is out of control, because felines have no natural predators on the island.

Overall, Ellison wants to turn Lanai into the first economically viable, 100% green community as well as a popular tourist destination.

The old joke about Ellison is the answer to the question "What's the Difference Between God and Larry Ellison" is that God doesn't think he's Larry Ellison. However, on Lanai, Ellison thus far better embodies the namesake of the company that made him the fifth richest man in the world – an Oracle; a priest or priestess acting as a medium through whom advice or prophecy was sought from the gods in classical antiquity. He is bringing Lanai back, and so far at least, the residents of the island seem to love him.

Articles Written by Amy Lamare
Amy Lamare is a Los Angeles based writer covering business, technology, entertainment, philanthropy, and pop culture. She spent 8 1/2 years covering the entertainment industry for www.hsx.com. She attended the University of Southern California where she majored in Creative Writing. An avid long distance runner, weekends she can be found running the streets of Los Angeles training for 1/2 and full marathons. Follow her on Facebook.
Did we make a mistake?
Submit a correction suggestion and help us fix it!
Submit a Correction
Discussion