Harry Saunders has long known that developers often get a bad rap in Hawaii. He is, after all, president of Castle Cooke Hawaii, which has developed more than 20,000 homes in Hawaii and currently is seeking to build the controversial 3,500-home Koa Ridge project in Central Oahu.
But Saunders is especially aware of the criticism lately since one of his colleagues, Carleton Ching, the company’s vice president of community and government relations, was nominated by Gov. David Ige to be chairman of the state Department of Land and Natural Resources, angering environmentalist groups and others who worry about Ching’s ties to developers.
"It’s unfortunate that any group jumps to a conclusion that because he (Ching) has worked in the development arena for 30 years in various forms, from state and different private organizations, that somehow that makes him evil," said Saunders, who has been Castle & Cooke president since 2001.
"If people, these groups, have known Carleton, have worked and interacted with him and said, ‘I don’t like this guy,’ that’s one thing. But to say, ‘Oh, … he’s evil somehow,’ well, that’s the farthest from the truth."
Saunders said he spoke with Ching about the DLNR opportunity and "his motives are actually good. He feels like if he can make a difference and help in the mission of DLNR, he’ll be passing along something to his grandkids."
Saunders said the function of Castle & Cooke Hawaii is to manage billionaire David Murdock’s properties in Hawaii, including 4,000 acres of land, 800,000 square feet of commercial space at Dole Cannery, energy projects, aviation operations and the visitor attraction Dole Plantation. There also is a Castle & Cooke California, which manages Murdock’s mainland properties.
Saunders joined Castle & Cooke as a real estate agent in 1975 when it was called Oceanic Properties. Before that he had worked at Real Estate One and taught at a real estate school. Other jobs included men’s department manager at Liberty House and bar and restaurant manager of the old Pinky’s Broiler, both in Kailua.
"Bars and restaurants … that is training for life," Saunders said Tuesday. "You deal with people at their best and their worst."
Now 64, Saunders has been involved with many nonprofits but currently is focused on the Hawaii Business Roundtable and Bishop Museum.He is a Kailua High alumnus and also attended the University of Colorado and the University of Hawaii but did not graduate.
Once he retires, he said, he might go back to UH to get a business degree — not that he would really need it.
Saunders and his wife, Susie, have three adult children and live in Kailua.
Question: What is the status of Castle & Cooke Hawaii these days?
Answer: The status is that basically we continue to operate and explore and expand on our diversification.
Castle & Cooke is basically located in two specific areas. One, of course, is Hawaii, where we have maintained and managed our land, some 4,000 acres.
We do residential development. The key project that we have been working on is Koa Ridge. … And while we’re awaiting the completion of that entitlement process, we have been doing infill projects. We just closed out a small project in Ewa. … We’re starting construction and sales activity in Kakaako, on 400 Keawe.
And then from the commercial aspect we have some 800,000-plus square feet (on 11 acres) at the Dole Cannery, which we continue to manage, bring in new tenants, extend tenants, and start the plan for the future potential redevelopment of it, five to eight years from now when the rail comes in and we’ll be bordered by two stations, at Iwilei and Kapalama.
We also have the Dole Plantation operations, which promotes diversified ag, particularly Dole pineapple, coffee and cacao. That’s probably the second-largest attraction in the state. We had, last year, some 1.7 million visitors.
Q: What’s the relationship with Dole Foods?
A: Dole and Castle have always been related historically because Castle & Cooke was the parent company at one time — Dole, Waialua Sugar, Kohala Sugar, extensive land holdings.
Then it went through a series of go-private, go-public, go-private.
Then Dole separated from Castle. Castle took the lands and became the real
estate arm of Dole, which, of course, was the food company, internationally known. It changed its name from Castle & Cooke to Dole on the New York Stock Exchange.
Then just recently, Mr. Murdock took Dole private. So now he is the 100 percent owner of Dole Foods and he’s the 100 percent owner of Castle & Cooke. … We provide services to Dole in Hawaii as far as land management, etc., because that is our area of expertise.
Q: Perhaps most newsworthy about the company right now is the fact that one of your executives, Carleton Ching, was nominated by Gov. David Ige to become director of the Department of Land and Natural Resources. But because Castle & Cooke is identified with developer interests, some folks are worried about that choice. What is your reaction to that nomination, and did you play any role in promoting his name to the governor?
A: Actually I did not play a role in promoting his name. (Ching) did chat with me and I basically said, "Are you sure you want to do this — and why?" And I felt that he was sincere in wanting to give back and share his skills and knowledge that he’s learned over 30 years working here in Hawaii to give back to the community. …
Being from the business world, he tends to want to get things to happen. That’s not a bad thing. To keep water flowing, you need to keep reservoir areas clear. You need to have streams clear. You need to make sure we don’t have invasive species that take over our natural habitat. Those are things that we have done as landowners, and those are the things DLNR is responsible for, so I saw a real mix. So I said, "Go for it." … I encouraged him, but, no, I did not put forward the name. There was no conspiracy.
Q: So you think Ching’s management background makes him an ideal state
executive for DLNR?
A: Yes. I would think any agency would want to have somebody like that. Yes, DLNR has environmental responsibility, but … it’s a wide range of things. Those are environmental and operational. You’ve got the small boat harbors. … You’ve got the Commission on Water Resource Management. You’ve got invasive species. And DLNR has 700-800 employees. It has … a (large) budget, and someone who doesn’t have any business experience is going to be challenged trying to manage those things. …
Q: I read a blog item that claimed Ching about 10 years ago called for the Land Use Commission to be dismantled.
A: That’s what others said he said. None of us have ever advocated eliminating the LUC. But when people ask what we can do to get more affordable housing, we do say put in more certainty and efficiencies.
When it first came out, the LUC was to look at general policy, but like many organizations, there tends to be an authority creep. And it’s just my experience in going through the land-use process, and then going through zoning, that there’s tremendous overlap, and I’m not sure if the state, looking from a policy perspective, should be into the zoning-type issues. Just like the cities should not necessarily be into the state functions. We have a division of labor, and I don’t think it’s been efficient for anyone to have two sides doing the same thing.
Q: What about that view that the LUC takes the broader view and doesn’t take an interest in issues like property tax generation and such, and that there is some sort of a state general plan that even the counties are supposed to abide by?
A: Right, there’s a state general plan, but there’s also a county general plan. So again, it’s what are the state’s responsibilities and what should be the community’s responsibilities?
Q: Do you think regulations hinder housing supply?
A: They do. … Regulations are required for any function you do. Whether it’s housing development, farming, running an airport, whatever, there are regulations for health and safety. But when those regulations take on the role of stopping or delaying, as a tactic for people who are looking for what can we do to delay something, such as housing, I just kind of look at the evidence. …
When I look at statehood through the advent of the Land Use Commission (in 1961), Oahu had something like … 10,000 homes a year being delivered. … From there it dropped to about 5,000 homes a year, and then as regulations continued and expanded, at both (state) Land Use and county levels, and litigation become more prevalent in land-use decisions, we’ve seen over the last five years homes that are in the neighborhood of 1,200 to 2,000 being brought in. And when I say "homes," I’m including condominiums, all kinds of homes. … The last time it was that low was in 1943 and 1944. Now what was happening then?
Q: World War II.
A: Right. So I’m just saying. That’s not a political statement. I’m just saying, gee, if we don’t have homes being developed, being built, … basic economics says … prices will go up. … Again, I look at evidence: A single-family home in 2001 — that’s when we got our first land-use approval — median prices were $300,000, and Dec. 31 of 2014, the median price was $690,000. What’s the cause? A whole bunch of reasons. … But that’s the median price. That’s not the high-end price for the Hong Kong buyer and all that. That’s everyday guys trying to buy a home.
The evidence suggests that the current processes are not beneficial to creating affordable homes.
Q: What do you think about the push for relaxed zoning to allow for accessory dwelling units and such, mobile homes maybe, container housing?
A: We have a huge problem of a shortage of housing, for all price ranges. … So I think we have to be creative. … I’m sure there are details we have to look at — there’s health codes, safety codes — but how healthy and how safe is that tent in Kakaako? Is a container healthy and safe? Probably a heck of a lot more healthy and safe than a tent, or a sleeping bag under a bridge. So, I mean, we gotta look at that.
The state and the counties have a ton of land they’re not utilizing. People might not like to hear this but there’re some schools that have been basically shut down because of lack of enrollment, and, gee, it’s state-owned land; it’s got sewers, it’s got water. Could those be put into some sort of a facility to help house the homeless?
Q: Does Castle & Cooke Hawaii have any more large housing projects in mind?
A: We have Koa Ridge. Beyond that we don’t, because none of our other lands are within the urban growth boundary. We do have one site that’s beyond Koa Ridge; it’s sort of the second portion of it, Waiawa, but it has requirements. We put it forward but it was not approved by the state Land Use Commission, but they said, hey, you can come back if you accomplish these things and these things happen. So, OK, that’s a path for down the road.
So, what we are doing is looking at other lands that are entitled that haven’t been developed. Like a few of the small infills that we’ve done over the past several years. We just finished up some 500 units in Kapolei that was part of their master-planned community. And we’re looking at other things like that. But do we have visions and hidden agendas to go out and pave over with housing out in Central Oahu pineapple fields? No. I’ve got pineapple out there. We’re trying to expand our coffee fields. We’re trying to expand our cacao fields.
Q: You attract a lot of tourists to Dole Plantation and so are kind of in the tourism business, too, right?
A: Yes, we’re very much in the tourism business. I guess you could call it agri-tourism.
Q: Could you talk a little bit about some of the company’s energy projects, including the undersea cable?
A: The undersea cable is an idea we came up with in 2008. If you recall back then, the state was just starting and trying to address the high cost of energy. … We actually built the first utility-scale solar farm, on Lanai. It was the largest in the state at 1.2 megawatts.
We … developed studies on the ability to do a 200-megawatt wind farm. We did five years of testing the wind quality, we realized it would be a world-class wind site, comparable to some of the best sites in the world.
We did the studying regarding where a cable could go and have minimum impact on the seabed and the community. We looked at how it could tie into the Oahu grid and those benefits.
Now, since that time, a number of things have transpired. There’s been several wind farms built on Oahu. The cost of solar has come down dramatically. And the success of rooftop solar for homes has dramatically increased. So we’re in a different place in 2015 than we were in 2008. But there’s still going to be the demand … for interisland energy creation and transmittal to Oahu.
Q: You think it’s still economical?
A: I believe it is. However, you’ve gotta look at the bigger picture. … Part of being a democratic society is all voices will be heard, and the powers that be need to make the decisions. So from an economic point of view … I believe it could still pencil today. However, from a political point, it may not be appealing to have a large wind farm on a neighbor island and transmit (the energy) to Oahu.