Hawaii Business CEO of the Year 2013: Stanley Kuriyama of Alexander & Baldwin
Stanley Kuriyama did something all too rare for a CEO: He put his company’s success ahead of his personal interests.
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The team that is bringing A&B back home. The leadership team at Alexander & Baldwin is, from left, Paul K. Ito, senior VP, CFO, treasurer and controller; Nelson N.S. Chun, senior VP and chief legal officer; Stanley M. Kuriyama, chairman and CEO; Chris J. Benjamin, president and COO; Meredith J. Ching, senior VP, government and community relations; George M. Morvis, Jr., VP, corporate development; and Son-Jai Paik, VP, human resources.
Photo: Mark Abeit
A&B’s new investments range all over Oahu, from the Waianae coast and Pearl City to Kakaako, Kahala and Kailua, and to the West Maui resort of Napili. There’s also A&B’s purchase of construction company Grace Pacific and Kuriyama promises there will be more property acquisitions in the future.
Kuriyama’s selfless and deft handling of the split with Matson in June 2012, plus his guidance and repositioning of A&B since then are the reasons Hawaii Business named him its CEO of the Year.
As this issue went to press, A&B was finalizing its latest blockbuster purchase: commercial properties from Kaneohe Ranch Co. and the Harold K.L. Castle Foundation for $373 million. The sale covers more than 600 acres and includes four Kailua shopping centers that are anchored by grocery or drug stores; 10 retail strip centers and eight light-industrial properties in Kailua; 22 properties with commercial improvements; plus agriculture and preservation-zoned Kailua land. The sale is expected to close in late December.
Financial analyst Cris Borden, president of Kobo Wealth Conservancy, applauds the Kailua sale to a local company with a deep understanding of local values. “I think they would be great stewards,” he says. “They do good things with their properties.”
Hawaiian Telcom President and CEO Eric Yeaman calls the latest deal an important step for A&B. “This allows them to diversify their investment portfolio and keeps it (Kailua) in local hands and the hands of a proven local real estate developer. If it was sold to some mainland company, it would be a tough situation for the community to accept.”
(Yeaman sits on the boards of both A&B and the Castle Foundation, so he excused himself from board discussions of the Kailua purchase.)
Yeaman says A&B is already a hero in Kahala for rescuing the neighborhood’s appearance and property values from the eccentric ownership of Japanese billionaire Gensiro Kawamoto. The Japanese tycoon, who was arrested in Tokyo in March for tax evasion, bought a reported 160 Hawaii homes starting in the late 1980s, and then let many slide into decay and even ruin.
In September, A&B finalized the purchase of 27 of Kawamoto’s Kahala properties, plus three on the Windward side and 146 acres zoned for agriculture in Kihei, Maui.
Included in the deal were statues, furniture, art, an SUV and two vintage Jaguars discovered in a garage. The deal cost A&B $98 million – a fraction of what Kawamoto paid.
After the separation with Matson, Kuriyama says, the company started shifting its investments from a diversified national portfolio to properties mostly in Hawaii, to take advantage of the company’s local expertise.
CEO Stanley Kuriyama in the A&B conference room.
Photo: Mark Arbeit
“What changed was thinking about how we’re going to identify ourselves on Wall Street as a much smaller company. That’s where the Hawaii focus came back into play. What Wall Street would appreciate most and where we can create the most value is in Hawaii, hence our strategy of moving our investments in mainland commercial properties to investments in Hawaii commercial properties.”
Currently, the ratio of mainland to Hawaii properties is about 60/40, but Kuriyama says that will gradually change. Though there’s no timetable for finishing A&B’s redeployment, the company is constantly hunting for attractive local properties, chiefly on Oahu because of the population concentration and because of the company’s substantial deployment already on Neighbor Islands.
“Because Hawaii is a much smaller market, with fewer commercial properties available compared to the mainland, you can’t just sell on the mainland and hope to find something in Hawaii. What you have to do is find the Hawaii property first, secure it, and then find the mainland property to sell.”
“A&B is reverting to Hawaii … and reinvesting in Hawaii,” says A&B director Walter Dods, with admiration for both the plan and the man leading it.
At A&B, Kuriyama’s leadership style hovers between very calm and utter calm. He joined the company in 1992 as VP of A&B-Hawaii – the division for local property management and development, as well as food products – and steadily rose through the leadership ranks, with some of his titles overlapping each other:
- 1999: Named a VP of A&B and executive VP of A&B-Hawaii;
- 2000: vice chairman and CEO of A&B Properties;
- 2005: president and CEO of A&B Land Group;
- October 2008: president of A&B;
- August 2009: chairman of Matson;
- January 2010: CEO of A&B; and
- June 2012: chairman of A&B.
Kuriyama has always been laid back, says attorney Nelson Chun, in-house A&B counsel for the past decade and a friend for 35 years. The two men met while law clerks right after graduating from law school: Kuriyama from Harvard and Chun from Northwestern, both class of 1977. (Kuriyama got his undergraduate degree at UH-Manoa.)
They shared office space clerking for the late federal Judge Dick Yin Wong and became good friends, with Kuriyama serving as best man at Chun’s wedding during the year they clerked together. They both joined the law firm of Cades Schutte Fleming & Wright and both became partners, with Kuriyama specializing in real estate and real estate financing, and Chun in corporate law.
Grace Pacific gives A&B a construction division that it previously lacked.
Photo: Mark Arbeit
“He’s low key, very thoughtful and very smart,” says Chun. “He thinks things through, but is decisive. And he’s got the kind of personality people feel comfortable with.”
Since taking the reins at A&B it’s Kuriyama who has orchestrated the flurry of landmark deals, including the separation from Matson and the acquisition this year of Grace Pacific LLC, a construction company that specializes in the building and repaving of Hawaii’s roads.
Grace Pacific provides A&B with some of the construction muscle needed for the refurbishment of the Kahala properties and two big developments A&B has planned for Kakaako: a partnership with Kamehameha Schools to build a residential community at 600 Ala Moana, and the 341-unit Waihonua tower near Ala Moana Center.
The Kawamoto acquisition had been in the works for years. In fact, A&B made its first offer four years ago, says Kuriyama. “This is not an overnight deal,” he adds, relishing the understatement.
With an agent in Japan handling A&B’s interests – Kuriyama never met Kawamoto in person – the deal was completed in September and already some of the properties are in the process of being sold.
As for the cars and household items included in the deal, “We’re assembling everything in one of the larger homes,” he says. “We’ll sell it all off at an estate auction. The sad thing is he (Kawamoto) had either torn down many of the homes or left them in a very dilapidated condition. We’re probably going to have to tear down a few homes that can’t be salvaged and then rehab homes that can be.
“It was a very nice side consequence to (save a neighborhood,) but because we saw property values were being suppressed there, it created an opportunity. Because the market has been suppressed for several years now, I don’t think anyone knows what the true market value is. Rather than trying to guess at what that number should be, we’ll try and let the market inform us.”
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