Part 4

Hawaii Business salutes the people, places, businessses and events that profoundly changed Hawaii over the past half century.

June, 2005

Kaanapali

Before Kaanapali became the world’s first planned resort community and home to six hotels, five condominiums, two championship golf courses, 35 tennis courts and the Whalers Village Shopping Center, Lori Sablas remembers the area simply as being the place to catch dinner.

“This used to be my dad’s lobster grounds,” says Sablas, who grew up in Kahana, just a stone’s throw from Kaanapali. “I would always come here with him. He’d set the trap, pull it up and get a lobster – and that was dinner for the family.”

Things really began “cooking” in 1959, when American Factors Inc. (Amfac) started developing the area. Kaanapali Resort opened in 1962 and its first hotel property, the Sheraton Maui, opened for business a year later. Today, Amfac has morphed into the Kaanapali Development Corp., and the 1,200-acre resort lures half-a-million visitors annually.

Looking to the future, Shelley Kekuna, executive director of the Kaanapali Beach Resort Association (KBRA), says, “Development would be a challenge for us, because we’re pretty much ‘developed out,’ although we do have some land mauka and a little north that’s part of Amfac’s original land holdings. We’re also faced with the same thing that everyone on the west side [of Maui] is faced with, which is our density and traffic issues.”

To that end, Kekuna says, the resort and the entire West Maui community are working toward establishing an acute care medical facility in the area. She says the resort has more than 3,400 employees and annual revenues of about $400 million.

Sablas, herself a former KBRA executive director, who’s entering her 16th year as director of Pookela, a program promoting Hawaiian culture, at the Kaanapali Beach Hotel, says the resort has contributed much to Maui’s economy.

“Amfac took this plot of land and turned it into a booming economic entity for the island,” she says. “I remember Amfac’s president saying one time that the plantation, Pioneer Mill, has 5,000 acres and employs 500 employees, while the resort has 500 acres and employs 5,000 employees. Kaanapali has definitely made an impact on the island.

“It’s kind of neat to watch this destination evolve into what it has become. And even after all these years, I still love to talk to our guests and see them teary-eyed when they have to leave after having the vacation of their lives.” -LT

Kahoolawe

One dollar per year. It’s hard to believe, but that’s how much Harry Baldwin and Angus McPhee, then lessees of Kahoolawe, charged the U.S. Army to sub-lease the southern tip of the island for bombing practice back in 1941. Of course, that original agreement became moot once martial law was declared several months later, following the attack on Pearl Harbor.

The ensuing war gave the military the motive and freedom to drop hundreds of thousands of tons of bombs on the uninhabited island, without any responsibility for removing unexploded ordinance or restoring the land.

It wasn’t until 1953, when the U.S. Navy gained absolute authority over Kahoolawe, that a plan was formed to restore the island to a habitable state – after the Navy no longer needed it. But engaging in the Vietnam War gave the military plenty of reasons to need it for target practice well into the ’60s and ’70s. “I think the island is of very little use for anything else,” said Adm. John Hyland, commander of the U.S. Pacific Fleet, in 1969, in defense of the Navy’s continued bombing of the island.

Those in opposition to the Navy’s use of Kahoolawe (primarily Native Hawaiian groups, environmentalists and politicians), who for years had been unsuccessful in their attempts to end the bombing, did not take well to that sentiment. In the mid-’70s, a group of Native Hawaiians rallied around the cause and began a period of highly publicized protest. Dozens of members of the Protect Kahoolawe Association (now known as Protect Kahoolawe Ohana) attempted several unauthorized landings onto the island, but it was the attempt made on March 7, 1977, by activists Kimo Mitchell and George Helm Jr. that catapulted the issue into the public spotlight.

Helm and Mitchell, who paddled in together on a surfboard, disappeared in the waters surrounding Kahoolawe while trying to rescue some friends who were stranded on the island. Their disappearance helped attract national attention to the issue, paving the way for the eventual repatriation of the island. On May 7, 1994, Kahoolawe was finally returned to the state of Hawaii, ending more than half-a-century of military control of the island. Since then, the Kahoolawe Island Reserve Commission has been managing the cleanup and restoration efforts, along with the state and the Navy, with the state assuming control of the island upon completion. -JLY

Roy Kelley

In the late ’60s, Roy Kelley was both revered as a friend of the middle-class tourist, and reviled as the culprit behind cheek-by-jowl hotels in Waikiki and traffic jams on Kalakaua Avenue. Until Kelley built the Islander Hotel in 1947, Waikiki had been reserved for the wealthy, with hotels such as the Royal Hawaiian, Halekulani and Moana.

Over the next decade, he added three more hotels: the Edgewater, beachfront Reef Hotel and Reef Towers.

In 1963, when negotiations stalled between Sheraton and landowner Queen Emma over the lease to the original site of the Outrigger Canoe Club – between the Royal Hawaiian and the Moana Hotel – Kelley readily stepped in. Included in the agreement were leases on three Waikiki lots that later became the Outrigger East, West and Coral Reef hotels. The Outrigger chain was born.

An architect by trade who had worked nights at the Los Angeles bus depot to pay for college, Kelley was unapologetic about his vision to make Hawaii travel more widely accessible. Famous for arriving in Hawaii with his wife the day the stock market crashed in 1929, he didn’t believe in debt and spent what he earned. His idea of a corporate office was sitting behind the front desk of his hotels, supervising various departments, stepping in to do everything from greeting tourists to carrying luggage, if his employees didn’t move fast enough. He expected his managers to do the same. His family was also expected to work at the hotels: seven-day workweeks were practically a family tradition.

In John McDermott’s 1990 book, Kelleys of the Outrigger, one story told of the time a building inspector told Kelley to install hoods and fans in rooms with kitchenettes. He complied, but didn’t install vents, because the inspector didn’t tell him to. Maintenance included passing rugs from one hotel to another. “Everyone was happy, because everyone got new rugs,” wrote McDermott.

Since then, the chain has gone international, upgraded its image and diversified its product offerings. Outrigger Enterprise Inc. reported $403 million in gross sales for 2003. David Carey, who is married to Roy’s granddaughter Kathy, now heads the company. However, Roy Kelley will always be known as the patron saint of Waikiki’s budget-minded tourists. -MTK

Freeways

It was supposed to have been a one-of-a-kind spectacle – a public relations bonanza celebrating the near-completion of one of Hawaii’s most controversial construction projects. The concept was ambitious: 100,000 people participating in a “fun run” on the yet-to-open the H-3 freeway. Instead, as runners gathered at the starting line on Sunday morning, May 12, 1997, they were greeted by a group of protestors shouting, “Shame on you!” and “You’re walking on our mothers on Mother’s Day!”

The race drew 15,000 participants – a good number, but far short of the original goal. For Hawaiian activists like Mahealani Cypher, it can be said that the H-3 freeway itself has fallen short of expectations.

Today, eight years after the freeway’s opening, Cypher remains steadfast in her feelings about H-3, which links Halawa and Haiku valleys via a mile-long tunnel through the Koolaus. “The construction of the freeway was still a mistake,” she says. “It destroyed an enormous number of [Hawaiian] sites, and a great deal of our heritage was lost.”

The H-1 was completed with far less controversy. It is Hawaii’s oldest freeway, with some segments being built – it was then known as the Mauka Arterial – before Hawaii became a state. The first mile-long segment (located near the University of Hawaii overpass) was opened in November 1953. Freeway construction lasted until the late 1980s.

The H-3, meanwhile, has been a heated point of contention since 1970, when environmentalists objected to the clearing of vegetation in Halawa to make room for the freeway. Native Hawaiians joined the effort, saying the project cut through sacred burial and cultural sites.

The final price tag for the 16.1-mile freeway was $1.3 billion, making it the most expensive freeway in the state. Still, the freeway has its supporters. According to the state Department of Transportation, more than 100,000 motorists used the freeway in its initial opening weekend. In its first year, the H-3 reduced traffic on the Pali Highway by 10 percent and off the Likelike by 20 percent. Overall, the H-3 grabbed a 30 percent share of vehicle trips taken.

Of course, the H-3 hasn’t completely resolved Oahu’s traffic problems. If anything, it continues to be a galvanizing symbol on the island – a costly reminder of the balance between public necessity and protecting the environment. Recent talk of raising the state excise tax to fund a public rail system has people like Cypher shaking their heads in disgust.

“We studied the issue very carefully,” she says, “and we knew that if they had built the transit system in the 1970s or ’80s with the H-3 money, it would have been a much better expenditure of our public funds. I know that there were groups advocating a rail system on the Honolulu side as a way of protecting the environmental areas in the mountains. If they had transferred the [H-3] funds to the transit system, they would have been more well spent than building that concrete monstrosity.” -LT

Elmer Cravalho

It’s safe to say that few public servants have had a more lasting impact on Maui than former mayor and native son Elmer Cravalho. Now CEO of the Kula Community Federal Community Union, Cravalho is celebrating his 50th year of service in the Valley Isle’s business and political arenas.

“His legacy will be his ability to be a strong negotiator for the people of Maui,” says Joe Souki, a fellow Maui native and a member of the House of Representatives since 1982. “He knew how to leverage, and I believe the island of Maui prospered under his leadership.”

Cravalho began his political career in 1955 as a member of Hawaii’s territorial House of Representatives. He also served as House Speaker (1959-1967), a delegate to the 1960 Democratic National Convention, Maui mayor and chairman of the Maui Board of Water Supply.

Much of Maui’s development can be traced to Cravalho’s term as mayor. In the 1970s, he was responsible for developing the waterline from Wailuku to Wailea, which enabled the development of Kihei. “Up until that time,” Souki recalls, “Kihei was like a desert. The growth of Wailea was made possible through him, as well.”

Souki says Cravalho also played an integral role in the formation of Maui Economic Opportunity Inc., a private, nonprofit organization chartered in 1965 to help low-income elderly, children and youth, persons with disabilities, immigrants, other disadvantaged people and the general public to help themselves. Souki served as the MEO’s executive director for 16 years.

“I was relatively close to him, although I never served with him in the House,” says Souki. “I did sit for a while in his ‘kitchen cabinet,’ which was filled with friends, supporters and people who weren’t too friendly. He’d listen to our different opinions, and he acted as a sounding board. He liked that. I enjoyed the interaction with him. He was smart, witty and very quick. He had both a business heart and a social heart.”

Earlier this year, Cravalho was the keynote speaker at the United Filipino Council of Hawaii’s Progress Awards dinner. He received a special Ating Kaibigan (Our Friend) honor during the event. -LT

Japanese Tourists

Honolulu was the first stop in Japan Air Lines’ first commercial international flight from Japan to San Francisco, in 1954. JAL’s plane, the Douglas DC-6B, held 102 passengers and allowed one-stop transcontinental service in 10 hours. Airlines appreciated the more powerful engines, larger capacity and operational efficiencies (read: more profits), while customers appreciated the quiet engine, smooth ride and general comfort. Still, it would take another 17 years before Japanese tourism would approach economic significance in Hawaii.

More than 30 years ago, Hawaii Business reported that – at 230,000 – 1971 projections for Japanese tourist arrivals represented a 400 percent increase from the year before. That year, widespread acceptance of jet travel dovetailed with the then-Japanese-government-owned airline’s decision to slash round-trip fares to Hawaii in half. At the same time, the Japanese yen gained strength over the dollar, and the Japanese government allowed citizens to carry more than the equivalent of $100 in yen outside the country and introduced foreign investment incentives to reduce Japan’s heavy dollar surplus. Another reason Hawaii had become popular was what Hawaii Business called “the well-oiled industry of Japanese operators,” which brought tourists to Hawaii through tour packages pre-sold in Japan. That groundwork established the Japanese market as a mainstay in Hawaii tourism: today, Japanese tourists comprise about 20 percent of Hawaii’s tourism market. In the 1970s, local merchants complained that the regimented tour packages limited their exposure to Japanese shoppers. Today, Japanese tourists outspend their Mainland counterparts by about 60 percent per person, per day. -MTK

Ah Quon McElrath

Mainland miners had Mother Jones and Hawaii has Ah Quon McElrath. Although small in stature, the earthy, blunt-speaking McElrath has tirelessly elevated social causes and the needs of workers in this state.

McElrath was born to Chinese immigrants in 1915 in Iwilei. She went to work for union organizer Jack Hall in the 1930s and married Bob McElrath, the International Longshore and Warehouse Union (ILWU) information director for Hawaii, in 1941. McElrath became a pioneering force in Hawaii when she created the position of social worker for the ILWU’s Local 142. McElrath told the ILWU in a 2004 interview, “Lobbying the state Legislature was also part of my social work for the union. I worked for increases in public assistance and I used to testify for the ILWU about human services issues. É We helped push through a little Wagner Act for Hawaii’s agricultural workers in 1945, and later on improvements in workers’ compensation and unemployment insurance, as well as the Temporary Disability Insurance (TDI) act. These were exciting things that went to the nub of the existence of working people and their families.”

Bill Puette, director of the University of Hawaii West Oahu’s Center for Labor Education and Research, says, “I think the ILWU found her incredibly valuable and her ability to reach out to members and help them with problems that were beyond the contract and I think that’s a perspective that’s very helpful for the labor movement. It’s not just the things that the law says you are allowed to bargain collectively. There are other needs and issues that a progressive labor movement should be involved in and Ah Quon has always been trying to move people in that direction by her example as well as by her continuous scoldings.”

Those scoldings are received better when they come from someone with McElrath’s standing in the community. Even in “retirement” McElrath has served as a regent to the University of Hawaii and was recognized as one of its distinguished alumni in 2004. She was one of the principals who fought to save the Honolulu Star-Bulletin from going under in 1999. In January, the 2005 Hawaii Women’s Legislative Caucus dedicated its legislative package to McElrath, because of her longtime support of working people and economic justice.

McElrath tells the ILWU that there is value to teaching younger members about labor history. She said, “By learning our history we can develop new ways in which to enhance our personal lives as well as the collective lives of working people.” Something she’s been working on for the better part of her 90 years. -KAT

Agriculture

Over the last five decades, no other economic sector in Hawaii has witnessed such dramatic changes as agriculture. Where once waving green fields of sugar cane and tidy rows of pineapple covered the island landscape as far as the eye could see, now a spreading patchwork quilt of diversified farms threads throughout the state.

Once Hawaii’s biggest industry, overtaken by tourism in the 1960’s, agriculture today accounts for just 1 percent of the state’s income. “King Sugar,” at its production peak in 1930, covered 254,563 acres. Today, with just two plantations left (Hawaiian Commercial & Sugar on Maui and Gay & Robinson on Kauai), sugar production has shrunk to 47,500 acres. Pineapple, now limited to 19,000 acres and one cannery, at its peak in the 1960s spread over 76,700 acres, with nine canneries that churned out 80 percent of the world’s output of canned pineapple.

Hawaii’s former two-crop economy transformed more than our Island landscape. Immigrant laborers brought in from Asia and Europe by the Big Five made Hawaii the U.S.’s most multiethnic state. The sons and daughters of those immigrants, in turn, through political reform, labor unions and military heroism in World War II, helped set off a tidal wave of social change in the Islands.

Hawaii agriculture today is a dynamic, expanding sector attracting business entrepreneurs, high-tech knowledge, organic production, ag-tourist activities and increasingly well-educated farmers, with one in five likely to be female. The state’s burgeoning diversified ag sector, ranging from vanilla beans, lavender and goat cheese to bananas, anthuriums and shrimp brood stock, rose to $386 million in sales in 2003, accounting for 70 percent of the state’s total farm gate value of $553 million, the highest since 1990.

Even sugar and pineapple, facing changing times, have transformed their industries. Sugar is being explored as an alternative energy source for ethanol production. Pineapple’s new low-acid, super-sweet, fresh fruit sales, up a whopping 16 percent over 2002, makes the “King of Fruit” the state’s top commodity, with more than $100 million in sales in 2003.

Some things don’t change about farming: it still takes land, water and capital – longtime challenges still facing Hawaii’s farmers today. And it’s still hard work. -GM

Walter Dods

There are few if any downtown buildings that are associated with a single individual. The 438-foot First Hawaiian Center, the tallest in the state, is one such building. It’s the house that Walter built.

The former chief executive officer of First Hawaiian Bank and its holding company, BancWest Corp., was involved in every aspect of the building, everything from picking the architect to serving as the occasional on-site “supervisor.” Completed in 1996, the center was designed to resemble a sleek ship, and it was Honolulu’s equivalent of the Depression-era Empire State Building, offering soaring inspiration during stormy economic times.

However, as impressive as it is, the First Hawaiian Center is overshadowed by Dods, whose Dickensian life and times is the ultimate local-boy-makes-good story.

Dods grew up in East Honolulu’s Aina Haina and Kuliouou Valley, sharing a Quonset hut with his parents and his six brothers and sisters. He worked his way through St. Louis School and got a job in the mailroom at First Insurance shortly after graduation. He became an account executive before moving to the Dillingham Corp., where he rose to manager of advertising and promotion. In 1968, the year he received his degree in business from the University of Hawaii, which he had been attending at night, Dods joined First National Bank of Hawaii (soon to be First Hawaiian Bank) as its director of advertising and public relations.

There the charismatic, consensus-building Dods was quickly spotted by First Hawaiian’s charismatic, authoritarian president and CEO, John Bellinger. Dods rocketed up the bank’s corporate ladder and was named First Hawaiian’s president and Bellinger’s eventual successor in 1984. Five years later, he became head of the bank after Bellinger’s unexpected death.

Under Dods’ leadership, First Hawaiian was transformed from a modest, second-place Island institution into Hawaii’s large and most profitable company. But Dods’ influence was felt far beyond the balance sheet. Moving effortlessly within Hawaii’s halls of power, he counseled leaders of every stripe and raised millions of dollars for various community organizations, winning loyalties for life. In short, he built a towering reputation that will likely outlast any piece of architecture, no matter how striking. -DKC

Chris Hemmeter

In the 1980s, Chris Hemmeter was Hawaii’s answer to Donald Trump: both were self-made millionaires with larger-than-life personalities, developers who built monuments to themselves, symbols of a decadent decade. Both lived by the credo bigger is better. The son of an inventor, Hemmeter pioneered the building of megaresorts.

These fantasy destinations were replete with extravagant touches, such as the faux tropical environment (dubbed “Disneyland West” by critics) at the $68 million Hyatt Maui, fountains with marble horse statues at the $350-million Westin Kauai, artificial lagoons, dolphins and a massive art gallery at the $310-million Hilton Waikoloa. Tacky? Maybe, but they also gave the nouveau riche glitterati new reasons to come to Hawaii.

Fortune magazine credits Hemmeter with influencing much of casino king Steve Wynn’s plans for the Mirage in Las Vegas, famous for housing Siegfried & Roy’s white tigers and an artificial rain forest. Hemmeter was only 33 when he developed the 4.5-acre, $100-million Hemmeter Center – site of the $70-million Hyatt Regency Waikiki, plus shopping and convention facilities – the largest private construction project Hawaii had ever seen. That was in 1973. By 1988, Forbes magazine had named him among the 400 richest Americans, with $225 million in assets. Houseguests at his East Oahu homes included former presidents Ronald Reagan and Jimmy Carter, for whom he designed and raised funds for the Carter Presidential Center of Emory University in Atlanta.

As the decade closed, financing for his projects fizzled, and the golden boy’s halo began to fade. Hemmeter left Hawaii in 1991, after losing his bid to develop Aloha Tower. He tried to relive his glory days in New Orleans, with what was to be the biggest casino in the country, the Grand Palais, with 200,000 square feet of gambling space, almost double what was then the world’s largest casino: Donald Trump’s Taj Mahal. Instead, he became entangled in Louisiana’s brand of old-boy politics and lost his fortune in the process. He filed for personal bankruptcy in 1997, reporting $87 million in debts and $720,000 in assets. He died of cancer in 2003.

Hemmeter’s legacy is a double-edged sword: his over-the-top projects enhanced the state’s image as a world-class luxury destination, but, in the process, eradicated the Hawaiian sense of place from the landscape. -MTK

Pan Am Airlines

If you were a school kid in the 1950s (and some of you in the ’60s and ’70s), there’s a good chance you had a Pan Am flight bag. This was the decade when Pan American Airlines blazed the trail for commercial jets, at a time when most in the airline industry placed its bets on the turboprop as “the next big thing” in commercial aviation.

Instead, Pan Am founder Juan Trippe was the lone wolf, who demanded not only a commercial jet, but one that met his calculations of the minimum capacity and range needed in order to be profitable – pioneering an industry standard based on seat-miles – and one that would carry twice as many passengers as propeller transports while delivering more profits than the most affordable competition. Thus, the Boeing 707s were born.

That same decade, Pan Am introduced tourist-class fares that cost about half the luxury rates of the time, another boon to Hawaii’s tourist trade. Pan Am’s ties with Hawaii actually began 20 years earlier. Before there were planes capable of crossing the Pacific Ocean, Trippe noticed that Hawaii, Guam and Manila formed a line of steppingstones to Asia. By November 1935, the first commercial transpacific flight landed in Honolulu, establishing a San Francisco-Honolulu route that is still used today.

Pan Am’s last great investment was also its downfall: the wide-body 747s, which flew both passengers and cargo. In the 1970s, Pan Am drove itself into debt when it purchased too many of these planes, coinciding with a world oil crisis and economic recession. The airline would dissipate slowly over the next two decades, selling off its assets in the 1980s and finally declaring bankruptcy in 1991. -MTK

Fast Food

Fast food as we know it today may not have originated in Hawaii, but we’ve definitely made it our own. Mainland tourists often look quizzically at the presence of Spam, saimin and – for a brief moment, plate lunches – next to Big Macs and Quarter Pounders on the McDonald’s menu.

Don Ho

“Tiny Bubbles” may be his signature song, but it’s his giant, bubbly personality that turned Don Ho from a small-time local musician into an international superstar. From his earliest days as an entertainer, performing at a small Kaneohe tavern called Honey’s, Ho exuded a charm and charisma unrivaled by any other local entertainer.

His magnetic personality and deep, melodious voice drew hordes of people from around the island, turning Honey’s into one of the hottest, most crowded venues in its time. Ho’s show became so popular that he eventually opened a new venue, Honey’s Waikiki, where he attracted a heavy tourist following.

But it was after Ho was invited by the legendary Duke Kahanamoku to perform at Duke’s nightclub in 1962 that he really hit his stride, gaining international fame. Backed by musical heavy hitters, The Aliis, and armed with his bottomless glass of scotch, Ho regularly packed the place with crowds of people eager to catch his lively performance, which married singing with humor and lots of audience participation. Ho’s antics often involved raising his glass to the audience, urging everyone to “suck ‘em up,” and bringing fans onstage for kisses and hugs.

As word spread of Ho’s electrifying performances at Duke’s, he was thrust onto the national entertainment scene. He performed at high-profile venues across the country, made TV appearances with Johnny Carson, Art Linkletter and Joey Bishop and recorded a series of hit records. He even pulled off his own TV special, showing the nation what locals knew all along – that Don Ho was born for stardom.

These days, however, the living legend spends most of his time under a different kind of spotlight. Ho performs weekly, as he has been for decades, at the Waikiki Beachcomber Hotel, where The Don Ho Show (Waikiki’s longest-running show), continues to attract new and lifelong fans alike. Other than the absence of his trademark cocktail (Ho quit drinking several years ago) and his star-studded backup band, not much has changed about Ho’s performance. He still sits behind his organ, telling some jokes, sharing some stories and singing some songs. -JLY

In 1999, Don Ho was named Person of the Year by the Honolulu Chapter of the Sales and Marketing Executives (SME). Soon, someone dubbed him Hawaii’s “Sales Person of the Century,” which was not inappropriate for this Hawaii Icon. Hawaii Business had a lively interview with Ho that year, about his storied career.

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