Buy in bulk at a discount, divide, then sell pieces at market prices for a profit.

This is a simple strategy, and works for a variety of things: Costco muffins, abandoned storage container contents and land. It hasn’t, however, worked well for a Kahuku plantation community in the hands of a Florida developer.

Continental Pacific LLC specializes in the strategy, and expected that Kahuku Village V was an opportunity that matched its interest and experience.

Instead, Continental has faced opposition from village residents who refuse to leave their homes, which has added to the company’s costs.

Reynolds Henderson, a Continental principal, said it’s too early to say whether the sale of lots at Kahuku Village V will be a success or a failure for his company. It continues to be a struggle after seven years and serious difficulties.

"It’s been frustrating," he said. "It’s been crazy. It’s not the best deal we’ve ever done."

Continental is a small, primarily family-owned business with only five full-time employees. It has an odd mix of holdings that range from a duplex in South Carolina to an island in Chile.

Most of the company’s investments, according to its website, are undeveloped and often agricultural lands.

Such holdings include 3,600 acres in Virginia, and 16,000 acres that constitute the Isla San Pedro in Chile that Continental calls "an island left relatively untouched by human hands."

MERGED COMPANIES

Continental was established in 2000 and operates out of a building catering to medical tenants in Santa Rosa Beach on the Florida panhandle below Alabama.

Henderson, the 36-year-old son of the company’s co-founder Jere Henderson, leads the company, which was formed by a merger of two Alabama timber firms — Strother Timberlands Ltd. and Henderson Timberlands Ltd.

The firm’s history with timberland is what attracted it to Hawaii more than a decade ago.

Strother Timberlands, led by J. Barron Strother, had acquired several thousand acres of farmland on Hawaii island to grow timber in the late 1990s.

Continental looked to vastly expand in Hawaii with a bid in 2000 to buy C. Brewer & Co., a conglomerate that was once one of the Big Five firms that dominated commerce in the islands.

Continental offered $160 million for Brewer, which owned or controlled roughly 70,000 acres on Hawaii island and Maui. Hilo-based Brewer rejected the deal. After a lawsuit, Continental ended up buying a relatively small portion of Brewer land on the Big Island.

In 2005 and 2006, Continental turned to Oahu for more land acquisitions, buying three clusters of mostly agricultural land covering about 1,100 acres in and around Kahuku from another major Hawaii landowner, Campbell Estate.

PIECES FOR SALE

Continental pursued its strategy of breaking up its purchases and selling off pieces.

For instance, Continental took one parcel, 892 acres mauka of Turtle Bay Resort acquired for about $17 million, and sold four pieces from 2007 to 2009 for a combined $11.6 million. The remaining 288 acres are leased to Kahuku Wind Power but are for sale in two pieces for a combined $9.3 million.

Continental bought the Kahuku Village property for more than $10 million, which included 26 acres of former sugar plantation housing, a nine-hole oceanfront golf course on about 140 acres and other sites.

Continental has put the Kahuku Golf Course up for sale with an asking price of $11.5 million and is leasing it to the city while waiting for the sale to close. The city operates it as a public course and charges only $9 for nine holes. The course has been in escrow with an unidentified buyer for almost a year.

Real estate firm Hawaii Homes International advertises the property as one of Hawaii’s last undeveloped beachfront tracks with potential to build a dream estate or beachfront ranch with your own private golf course.

The most valuable piece of the Kahuku Village property is the home lots that make up Kahuku Village V. Continental said it has spent $5 million on development costs — including permitting, infrastructure work and legal fees — to prepare for sale 72 lots in Kahuku Village V for prices between $150,000 and about $400,000.

So far, 20 lots, most of them with homes, have been sold or are in escrow. The developer also sold Rainbow School in the village for $225,000.