PUC Approves Ellison’s Lanai PurchaseJune 26, 2012, 12:40 PM HST · Updated June 26, 2:38 PM 0 Comments
By Sonia Isotov
Interim approval was been given to Larry Ellison on Monday by the Hawaii Public Utilities Commission (PUC) allowing his company to assume ownership of Lanai’s three utilities.
According to PUC documents released yesterday, the purchase of the island by Lanai Island Holdings, Ellison’s company, from Castle and Cooke Resorts, David Murdock’s company, has been under discussion for nearly two months.
This preliminary approval allows for Ellison to close on the purchase of Lanai, which is scheduled for Wednesday, according to PUC documents. The price of the transaction was not disclosed in PUC documents, but previous estimates put price at as high as $600 million.
The decision covers three utilities: Manele Water Resources LLC, Lanai Transportation Co. and Lanai Water Co. Inc.
“The scope of the commission’s proceeding is limited to the indirect sale and transfer of the three Lanai-based public utilities. In effect, the commission approves on an interim basis the indirect transfer and sale of the ownership interests in the three Lanai-based public utilities from Castle & Cooke, Inc. to Lanai Island Holdings, LLC,” wrote the PUC in its decision.
“The commission chooses to proceed with its interim action, so as not to jeopardize the June 27, 2012 closing date for the overall purchase and sale transaction, subject to the commission’s right to ultimately disapprove the indirect transfer and sale of the three public utilities.”
In the PUC’s decision, it was mentioned that Lanai Island Holdings, LLC alluded to their ability to make “significant investments in the substantial unregulated assets” in the event of the commission’s interim approval. However, the PUC added in their decision that their focus is on the regulated assets and operations of the three public utilities.
Ellison also committed to investing “a minimum of $10 million in the water and wastewater systems’ assets within the next five years,” according to PUC documents.
According to PUC documents, the following are included in the purchase:
- the Four Seasons Resorts Lanai at Manele Bay
- the Four Seasons Resorts Lanai Lodge at Koele
- two golf courses and club houses (The Experience at Koele and The Challenge at Manele)
- over 88,000 acres of land (including, without limitation, the Koele Project District (600 acres of residential development)
- the Manele Project District (800 acres of residential development)
- Lanai City properties (248 acres of various commercial and residential assets
- Koele Stables
- Lanai Pines Sporting Clays
- CCI’s interest in La Ola Solar Farm that sells power to Maui Electric Company, Limited
- administrative buildings and central support services assets
- employee rental housing
- parks and recreation facilities
- Club Lanai site
- the regulated utilities (Manele Water, Lanai Transportation, and Lanai Water).
A final decision is still pending further review by the PUC and can still be disapproved.