New Big 5 May Be Emerging in Hawaii
Speculation emerges about an alliance of Hawaiian values that could be formed by nonprofits and government agencies with land holdings
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Some suggest an influential coalition based on Hawaiian values, not simply economic value, could help steer the Islands’ future
Photos Courtesy of (clockwise from top left): Kamehameha Schools, Hawaii State Archives, Queen's Health Systems, Hawaii State Archives
The remnants of the Big Five, once the dominant companies in Hawaii, continued to shrink last year.
The sale of more than 88,000 acres on Lanai to Oracle Corp. CEO Larry Ellison in June eliminated Castle & Cooke Hawaii as one of state’s largest landholders. A month later, Alexander & Baldwin spun off Matson Inc. and about two-thirds of the revenue from the largest remaining member of the Big Five.
Will a new Big Five emerge? Economists don’t think so. A few companies such as Hawaiian Electric Industries and HMSA are dominant in their fields, but they don’t have the broad economic, landowning and political power that the Big Five held in their heyday.
But some people are suggesting a new coalition of five prominent organizations based on values rather than value could influence the state’s economic future.
• Kamehameha Schools
with nearly $7 billion in assets and an annual operating budget of $1.3 billion
• The Queen’s Health Systems
net annual revenues of about $516 million
• Queen Liliuokalani Trust
annual operating revenue of about $40 million
• Department of Hawaiian Home Lands
net assets of about $717 million and annual operating revenue of more than $12 million
• Office of Hawaiian Affairs
assets of more than $650 million and annual operating revenue of more than $40 million.
Office of Hawaiian Affairs Trustee Peter Apo recently offered a list of five entities created by or for Hawaiians. Three of them are private nonprofits and the other two are government agencies:
Kamehameha Schools, The Queen’s Health Systems, Queen Liliuokalani Trust, Department of Hawaiian Home Lands and the Office of Hawaiian Affairs.
“I’d like to try to get them together and have a dialog to figure out ways to connect the dots, perhaps work together on a project or at least provide some direction,” Apo says. Collectively, they could offer a joint vision for a Hawaiian-driven future for the state, he says.
“Native Hawaiian cultural values are not just for Hawaiians,” agrees UH-Manoa social and cultural historian John Rosa.
Former Department of Land and Natural Resources Director Peter Young also sees merit in Apo’s idea. “I’m not suggesting the new Big Five is similar to the old in the sense of capital generation or political influence, but they could have an impact, and that’s actually a good thing.” Together, the five own or control substantial tracts of land, he notes, including KS’s 363,000 acres and DHHL’s 194,000 acres.
TZ Economics principal Paul Brewbaker doesn’t buy the notion of a new Big Five. “It’s hard to imagine these five entities as being serious contenders for significant, real capital formation in Hawaii on urban lands not encumbered with various special conditions of their existence or historical origins,” he said. “Capitalism has a tendency to work around these kinds of obstacles, not with them.”
Nonetheless, Brewbaker recognizes the political power that big landowners have today, though it is much diminished from the days of the Big Five.
“The new 21st-century interrelationship between large landholders and government is more subtle and involves special-interest groups,” he says. “In urban development, large landholders are among the most influential special interests.” As evidence, he points to decisions to build the “Second City” of Kapolei, to route the rail line to Hoopili and to locate the University of Hawaii-West Oahu and future Ka Makana Alii shopping mall.
While land remains an important source of wealth for its owners, it doesn’t contribute to the state’s economy income like it did when agriculture and related manufacturing dominated, says James Mak, UH professor emeritus of economics. “The structural shift from agriculture to services has diminished the economic and political power of landowners,” he said. “Tourism is capital-intensive, not land-intensive.”
But the influence of these Hawaiian institutions is based on more than just their landholdings, says Apo. “It would be interesting to have someone do a study on the impact of Native Hawaiian spending,” he says. According to the U.S. Census Bureau’s 2007 Economic Census, nearly one in 10 firms in Hawaii is owned by a Native Hawaiian or other Pacific Islander. Those 11,403 firms generated $2.3 billion and employed 16,197 people that year.
Often cast as anti-development, most Native Hawaiians want an economy that supports both traditional cultural values and sustainable growth, Apo says. “The politics of sovereignty cannot be separated from economic discussions. What good is having a nation if you cannot generate prosperity?”
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