Ten years ago, Larry Ellison, the eccentric co-founder of
Oracle Corp. and the 11th-richest person in the world, bought Lanai—the
Hawaiian island, that is. The $300 million purchase came with 98% of Lanai’s
90,000 acres, plus the two Four Seasons resorts that provide most of its
jobs, a significant chunk of its homes, and practically all its
commercial properties. Overnight, Ellison became almost everyone’s boss,
landlord, or both.
One
of the first things Ellison did was build Nobu, an
ultra-high-end restaurant chain. Local woodworker Chris Andrus was invited to the opening because his company,
Lanai Woodworkers, had helped build the place. He met Ellison on his way
to the bathroom and introduced himself by way of his handiwork,
pointing to the hostess stand and wooden walls. Ellison shook his hand
and told him, “We’re gonna do great work together.” That was
the last time they spoke. Two weeks later, Andrus was out of a job.
The space the woodworkers were renting came with Ellison’s purchase of
the island, and the billionaire’s agents told Peter Franklin, Andrus’s
friend and the owner of Lanai Woodworkers, he would have to either clear
out or sell the company to Ellison. Franklin decided to sell so the
shop would at least survive in some form, and the deal came with a job
for him. But there wasn’t one for Andrus, so at age 64, Andrus became Lanai’s
paperboy instead. Shortly after he took
over the paper route, Ellison’s hotels canceled the 150 newspapers
they’d been having delivered each morning, cutting Andrus’s business in
half. The hotels were getting iPads for their guests and didn’t need
hard copies anymore. With his business continuing to suffer, he fell
behind on his utility bills, and Ellison’s holding company, Pulama Lanai, terminated his rental
agreement. Eventually, he turned to Catholic Charities to help him stay
in his home.
And so it goes
on Lanai, where Ellison is a modern American king—incomprehensibly
wealthy and powerful. Many residents both rent from him and work for
him, and a provision in his residential leases states that if you’re
terminated from a job with any of his companies, you can be kicked out
of your home, too. Under Ellison, month-to-month leases are now standard for Lanai’s small businesses, as opposed to the five-year terms some were
used to before.
Gabe Johnson, who
represents Lanai on the regional Maui County Council, points out that
the government controls little public infrastructure on Lanai. He’s been left
mostly to haggle with Ellison's representatives over sidewalks and sewage lines.
On
one hand, Ellison’s wealth means he can invest more in the community
than the previous owner did. He’s renovated the pool and the movie theater, and he
kept much of the island on payroll for months during the pandemic. On
the other hand, his control has steadily tightened. Since the purchase,
he’s bought up dozens more homes and businesses, including the island’s
main grocery store and its lone gas station, community newspaper, and the only
non-Four Seasons hotel. Ellison keeps his plans a complete secret. Most locals have only heard that he intends to make the
island “sustainable,” with little explanation of what that might mean.
Because there are no real alternatives to Ellison’s control, his
decisions carry the force of law, with a minimum of discussion, very little due process or community input. Lanai’s small businesses are sputtering, and
even by U.S. standards, the island’s housing shortage is extreme. There’s
only one home for sale as of early June: a beachfront estate for $7.9
million. The median household income is $59,000, but it appears to be
climbing as richer residents move in. Locals whose families have lived
on the island for generations, often sharing homes with parents and
grandparents, are leaving as Ellison’s construction workers and Four
Seasons employees fill practically every available bed.
Lanai’s
unusual ownership structure originated with a Mormon missionary who
bought huge chunks of the place starting in the 1860s. Control of the
island passed from one family to another until 1922, when James Dole
bought it for $1.1 million and began transforming it from a small
ranching community into the world’s largest pineapple plantation. There is a legacy of strong community ties. Workers, many of them
Filipino and Japanese immigrants, would lean on one another during their
long days under the hot sun. Even today, everyone seems to know
everyone else, kids refer to adults with no blood connection as aunties
and uncles, and enormous birthday barbecues are a weekend rite.
Murdock
acquired the island via Dole Food Co.’s corporate parent in 1985. He’s
the one who oversaw the closure of the struggling plantation and the
construction of the two hotels that are now Four Seasons resorts. In the
end, even he couldn’t afford the island. Over his decades in charge, the
hotels grew run-down, the community pool began to look uninviting, and a
last-ditch play to install hundreds of energy-generating wind turbines
went nowhere. Then came Ellison.
The 77-year-old Oracle co-founder is a Republican
megadonor who has penchant for six-figure
cars and eight-figure mansions. In the
business world, he’s known for his ruthlessness and ego. During
Microsoft’s federal antitrust trial, Oracle admitted to hiring private
investigators to seek incriminating evidence against its rival,
including a PI firm that tried to pay janitors to hand over the trash a
pro-Microsoft trade group threw away. “Our job is to hurt Microsoft,”
Ellison said at the time. He’s fond enough of repeating the quote “It is
not sufficient that I succeed—all others must fail” that it’s often incorrectly attributed to him, instead of its generally accepted originator,
Genghis Khan.
In one of his
early interviews about buying Lanai, Ellison said his commitment to the
island’s community was strong. “Lanai is a very interesting project,” he
said, adding “What we are going to do is turn Lanai
into a model for sustainable enterprise,” he went on. “We are going to
support the local people and help them start these businesses.” A
decade later, residents tend to treat these promises as "waha" (a Hawaiian term for "bullshit”). Alberta de
Jetley, a retired journalist who’s lived on Lanai on
and off since 1951 (and sold the community newspaper to Ellison in 2019) says, “You could
start a small business, but where are you gonna put it?”
Ellison
has never made himself available to the community to discuss the
island’s future or their concerns, so most Larry sightings these days
amount to glimpses of his orange Corvette. Solomon Pili Kaho’ohalahala, a
native Hawaiian and seventh-generation Lanaian who represents his
island on the advisory council for Hawaii’s humpback whale marine
sanctuary, has asked to speak with Ellison about conservation more than
once over the past decade and gotten nowhere. “I’ve been waiting now for
10 years to have a conversation,” says Kaho’ohalahala. He’s unimpressed
with what Ellison has done so far, noting that the out-of-control deer
population is damaging the local ecology and that surrounding coral
reefs are taking serious damage as mud from the island slides into the
Pacific.
When locals
complain about Ellison’s influence on community businesses, it's usually one of two scenarios. In the first kind, he uses his
influence to shrink or shutter without explanation the businesses that
rent from him. This is what happened to Lanai Woodworkers. In 2019,
about six years after Franklin gave up control to Ellison’s company,
Pulama closed the wood shop with no explanation, leaving him jobless and
living in fear of being forced out of his apartment. “You’re always
holding your breath,” he says.
The
other kind of story involves Ellison introducing his own
version of the small business’s service and burying the mom and pop operation.
That includes the local rental car business (Ellison now has his own)
and a beloved poke market, which couldn’t compete with prices at a
grocery store that Ellison runs. That last one stings extra hard: “I
didn’t eat poke for two years,” Andrus says. Many residents fear for the
survival of the locally owned grocery.
Nick
Palumbo, who grew up on Lanai, ran a surf school at the Four Seasons
until Ellison’s company took over and changed the terms of his contract.
The new deal would have cut Palumbo’s pay by 40%, while forcing the instructor to take out an annual
insurance policy that was five times as expensive as his old one. The
hotel also insisted that Palumbo wear a Four Seasons uniform. “I
take all the liability for them, and I’m still just their employee,”
he says. “It was frustrating.” So he moved his lessons to the Big
Island. He says he wants to return to Lanai but doesn’t want to work for
Ellison.
Few residents
whose small businesses have suffered one way or the other will speak on
the record. Some cite nondisclosure agreements in their leases; some
who’ve lost a business still have a different one that rents space from
Ellison’s holding company, as almost all the island’s stores do. But
their fortunes can change quickly. Earlier this year Cafe 565, one of
the few remaining restaurants in town, closed after more than a decade.
Owner Kelly Matsumura, who also rents the space for the town laundromat
from Ellison, declined to comment.
The
30-day lease policy for commercial tenants, besides making things risky
for existing small-business owners, has sharply limited the ability of
new businesses to open on Lanai. No bank that serves the area will lend
startup capital to a business with a 30-day lease, says David Daly,
director of the Maui Economic Opportunity Business Development Center,
whose remit includes Lanai. “It’s not hard,” he says. “It’s impossible.”
Ellison’s
larger projects are often framed as community improvements, but can
change or disappear just as
quickly. For years, locals were promised a 150-unit housing project that
would include homes for purchase, but then Ellison's company abruptly announced
they’d all be rentals instead. So far, the holding company has nothing
to show for some of its flashiest promises, including that it would
build a tennis academy, a desalination plant, a university, and a film
studio. The net effect
of all these reversals is that many residents no longer take Ellison’s
company at its word. The anxiety has spiked since he moved to the island
in 2020. The changes to Lanai have seemed to accelerate.
The change
in tourists might be the most striking. Ellison has given his two Four
Seasons resorts a $75 million face-lift, and the suites at the oceanside
resort, which can run tens of thousands of dollars a night, are now
straight out of White Lotus, the HBO series about uber-wealthy,
high-maintenance guests at a luxury Hawaiian hotel. There are
tiki-torch-lined walkways, cocktail-fueled sunset cruises, and healing
spa treatments that cost as much as $750 a pop.
A visit from Tom
Cruise still generates a lot of discussion. Apparently,
Cruise flipped and totaled one of Ellison’s cars while driving on some
of Lanai’s mostly unpaved roads. A person who saw the destroyed car, a Toyota Land
Cruiser, and who spoke on condition of anonymity for fear of
retaliation, says Ellison's employees were called to clean up and recycle
the wreckage. There are no police records of the
incident because it occurred on private land, no one was reported
injured, and Ellison owned the tow truck. Until now, it never appeared
in the press. One former Four Seasons employee on Lanai, who asked not
to be named because of an NDA, says they were once suspended from their
job merely for mentioning that Cruise was ever on the island.
With all that’s happened over the past decade, many residents worry that their time on Lanai is
growing short. A handful of young families recently moved away,
including Palumbo, who left during the pandemic. Those who’ve left tend
to say they made the decision in part because even compared with a few
years ago, the island didn’t feel like home anymore.
Michelle
Fujie, a high school math teacher who grew up on Lanai, is engaged to
another local, but they don’t live together because they can’t find an
affordable house big enough for them and their three kids. If they ever
leave the island, she says, they might never be able to afford to
return, so she and her fiancé would like to rent one of the apartments
in the new development Ellison is building. She was committed to buying
something for a while, but at this point, with the wedding approaching,
she’s getting desperate. “We’ve got to think about ways that we’re going
to merge our family,” she says. Renting, “right now, would be a
solution.”
The units
will all be fully furnished two bedrooms, which has left islanders
wondering who the target tenants are. “It’s telling us, the people who
live here, ‘These aren’t for you,’ ” says Johnson, the county
councilman. “Furnished means it’s gonna be more off-island construction
workers, off-island hotel workers, off-island folks.” The @lanaicomedy
post on the housing project features a picture of Mao Zedong and jokes
that each home will come with a photo of “the projects benefactor”
for residents to greet each day when they get home.
The account’s posts resonate with Fujie. “My biggest worry, worst-case scenario, is that the island becomes this playground for only the rich,” she says. She does believe Ellison has been good for the community overall, but can’t tell whether he sees her home as more than just another plaything. “As an educator, this is where I get super emotional about it,” she says, choking up a little. “You would think that we would want our students to graduate and aspire to be more than just somebody’s servant.”
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