Island Breath: Save Mahaulepu

Note: This a article below is from the news section of HawaiiHealthGuide.com. This is a worthwhile site brought to our attention by Katherine Fisher.

By Julia Angwin MAHAULEPU, Hawaii -- Thursday December 26, 12:00 PM

AOL Time Warner Inc. Chairman Steve Case has battled everyone from Microsoft Corp. to some executives at his own company, who blame him for the failure of AOL's merger with Time Warner. But he's never had a foe that's four centimeters long, with eight legs and no eyes.

It's the Kauai Cave Wolf Spider, also known as the "no-eyed big-eyed hunting spider," an endangered arachnid about the size of a silver dollar that stands in the way of Mr. Case's plans to develop one of the last pieces of pristine beach-front property on the island of Kauai.

Mr. Case, a fourth-generation Hawaiian who now lives in Virginia, bought this slice of paradise two years ago when he paid $26 million and assumed about $65 million in debt for one of Kauai's largest sugar plantations, Grove Farm Company Inc. The farm owns more than 22,000 acres including the golden sand beaches known to Kauai residents as Mahaulepu, which is near the well-known Poipu resort.

The farm's management hopes to build a resort complex including a hotel, golf course and housing near the beach. However, to protect the spider's underground homes, the U.S. Fish and Wildlife Service is trying to designate more than 2,000 acres of Grove Farm's land as "critical habitat" for the spider and the endangered cave amphipod. Wolf spiders exist in other places, but only in this area of southern Kauai are they eyeless. One of their most distinctive traits is that they can live in the extreme humidity of a cave. "It's like finding a terrestrial whale," says Francis Howarth, an entomologist at the Bishop Museum in Honolulu, who discovered the spider in 1971.

The spiders are thought to live on a diet of amphipods, which are essentially eyeless, cave-adapted sand fleas. Most amphipods carry eggs in a kangaroo-like pouch, but the cave amphipod awkwardly carries its eggs in between its legs. "It's a rather spectacular animal in its own right," says Mr. Howarth.

Grove Farm is less enthused. "The proposed designation, much of which covers the Mahaulepu area, would be as devastating to [us] as Hurricane Iniki was in 1992," wrote David W. Pratt, president and chief executive of Grove Farm, in a letter to the Fish and Wildlife Service. Mr. Case's father Dan Case, who was named chairman of Grove Farm when his son bought the land, has lobbied the Fish and Wildlife Service on the issue several times in recent months.

The reason for the farm's concern: Mahaulepu's mile-long golden sand beach, flanked by limestone cliffs and giant sand dunes "is probably our most valuable land," says Michael Furukawa, Grove Farm's vice president. He says the farm has wanted to develop the land for years, but was hampered by financial problems before Mr. Case came along.

Now Mr. Furukawa worries that if the area is designated as a critical habitat for the cave critters, the state will zone it as "conservation" land that cannot be developed. To prevent that, Grove Farm has been searching for spiders on its land, hoping that if it finds them living in inland caves it can avoid the critical-habitat designation for the beachfront area. Still, it's a delicate business -- Grove Farm worries it could destroy the fragile underground caves, which are actually lava tubes, while looking for the spider.

Mr. Case, 44 years old, declined requests for an interview, saying through a spokeswoman that he is not personally involved in overseeing Grove Farm. In a statement, he said "there are no current plans to develop the Mahaulepu area" and that Grove Farm is focusing on other unrelated projects. "If and when we do have a proposal regarding Mahaulepu, it will be discussed at length with the many interested people, to ensure that it enhances, as opposed to diminishes, the overall quality of life on Kauai," Mr. Case said in his statement.

Some of Mr. Case's family members aren't so pleased with the idea of developing Mahaulepu. Mr. Case's cousin, Ed Case, who is a Congressman from Hawaii, says he wants Mahaulepu to be preserved. Distant cousin Michael Sheehan, who owned 20 shares of Grove Farm stock, is suing the firm in state court saying that it sold the land to Steve Case on the cheap.

Another cousin, Suzanne Case, is executive director of the Nature Conservancy of Hawaii, which aims to protect native plants and animals. Ms. Case says the issue has not been discussed among family. "We sort of know that it's out there, and we probably have different roles to play," she says.

Steve Case was raised in the suburbs of Honolulu and went on to co-found America Online, amassing a net worth that is estimated at $760 million, even after the last 18 months' plunge in AOL stock. He has kept his ties with Hawaii, visiting the islands most summers, wearing Aloha shirts at work and financing the creation of a new middle school in Honolulu.

His great-grandfather, Daniel Case, moved to the islands from Kansas in 1896. His grandfather, A. Hebard 'Hib' Case, moved to Kauai in 1919 and eventually became chief accountant at Grove Farm, where he introduced computers in 1956. One of his three sons, Dan Case, Steve's father, became an attorney in Honolulu. Today, about 100 Case descendants still gather at family reunions.

Grove Farm was in bad financial shape when Steve Case came along. By the late 1990s, the sugar business had dried up in Hawaii due to declining federal subsidies, high costs, and increased competition. Grove Farm had been leasing its lands for farming, and running shopping malls and housing developments. Debts were mounting. Bids for the lands surfaced in 1999.

When Mr. Case heard the plantation was available, he sent an e-mail to his investment adviser John Agee. "My macro investment thesis continues to be that Hawaii land has been pummeled over the past decade and is at an all time low; that most of the land owners are old families who are land rich but cash poor and thus unable to make the investments to maximize value," Mr. Case wrote in a Sept. 28, 2000, e-mail disclosed in legal filings.

Mr. Agee then toured the site with Mr. Case's father and e-mailed back: "It is some of the most beautiful land I have ever seen. I think the long-term potential for commercial and residential development is exceptional." In December of 2000, Steve Case's offer was accepted by shareholders, who are mostly descendants of Grove Farm founder George Norton Wilcox. Even so, Mr. Sheehan and 18 other shareholders are suing Grove Farm, saying the farm was sold too cheaply.

One of Mr. Sheehan's objections is that Grove Farm didn't calculate the true value of its "kuleanas." They are land rights created in the 1850s when King Kamehamaha III attempted a reform of the feudal system by giving Hawaiians claims on the lands where they were living. Kuleanas can be valuable because developments on those lands are exempted from strict zoning laws. Kuleanas are "guaranteed slam-dunk money in your pocket," says Mr. Sheehan. "I thought Grove Farm's kuleanas were worth about $100 million." Grove Farm says the lawsuit is without merit.

Mr. Sheehan claims Grove Farm had a conflict of interest during the negotiations: Dan Case's law firm was representing the seller, Grove Farm, while Dan Case was acting on behalf of the buyer, his son Steve Case. During purchase negotiations, however, Grove Farm waived the conflict of interest arising from this situation.

In a deposition, Dan Case explained why he asked Grove Farm for a waiver: "I wasn't sure at all if Steve was going to be interested, so I didn't want to disqualify our firm from the representation of a good client." The conflict was too great to ignore, argues Mr. Sheehan's attorney Richard Wilson. "Steve Case is not a fool. He didn't buy Grove Farm because he's a white knight, he bought it because it was a fire-sale."

In the meantime, a community group calling itself "Malama Mahaulepu" has formed to fight for the preservation of the rugged coastline. They say it is a "wahi pana," or legendary place sacred to native Hawaiians, and that many human remains are buried there. It is also one of the few beaches on Kauai undisturbed by hotels or condos.

Locals reach the beach through the rutted, red-dirt roads of Grove Farm's former cane fields. "This is our last wilderness," says Don Okuno, 44, a native Hawaiian who fishes at the Mahaulepu beach at night, using a spear and a flashlight to catch his prey. The group has tried several times to contact Mr. Case to invite him to tour the area with them. For now, they seek a different kind of protection. On a recent day, half a dozen members of the group gathered on the Mahaulepu beach, heads bowed, eyes closed, and prayed to Hawaiian gods, including Ku, the god of war. A member chanted in Hawaiian:

"Ku supreme, we summon your protection for this land ."

Judy Dalton, of the Kauai Sierra Club and Malama Mahaulepu, invited several dozen enthusiasts to see the beauty of the southeast shore between Spouting Horn and Kipukai. We sailed January 6th aboard the Spirit of Kauai operated by Captain Andy. Judy's message was to appreciate the beauty that we found on our journey and to protect it.

As to the images above... Just kidding for now! The image on the above-left shows a condominium highrise in Poipu. The image on the right shows Mount Haupu east of Paoo Point. Fortunately a few miles of land separate the natural beauty of one from the real estate boom of the other. Unfortunately, those few miles include the Grove Farms property called Maha`ulepu. If Grove Farm developes a large resort community there the juxtepositions of these two images won't be just an amusement.

What this trip revealed was that Kauai's southeast coast may not be quite as dramatic as the Na Pali on the opposite side of Kauai, but is perhaps even more beautiful. It is certainly more habitable and approachable. And that's part of its problem.

There is virtually no development east of the Hyatt Regency resort and golf course. There are miles of sandy beach and rugged cliffs. And now there is tremendous pressure to develope the area on Grove Farm property. You are probably aware that Gove Farm is controlled by the exCEO of AOL-TimeWarner, Steve Case. If you are interested in preserving this beautiful coastline, get involved now, before there are a thousand vacation timeshares are up for sale.