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The Facebook factor

LIHUE — The purchase of two substantial Kilauea properties has the community breathing a collective sigh of relief that 740 acres of rural land is now less at risk of development into a residential subdivision.

While Forbes Magazine reports the sale was in excess of $100 million to Facebook Chairman and CEO Mark Zuckerberg, Facebook has yet to confirm the sale, and the buyer’s name and sale has yet to appear on the county tax records.

The consensus among the growers at the Kilauea Farmers Market on Thursday was that they welcomed a buyer who intends to build a single home. There were many concerns with previous attempts to build a residential subdivision, they said, including one grower who leases farmland on the same property.

Kilauea residents say they are just happy it’s a residential owner and not a developer.

“We want to welcome our new neighbor to the community,” said Tom Pickett, who together with his spouse, Katy, runs the Kilauea Bakery and Pau Hana Pizza.

Kilauea real estate agent James O’Connor said he is not the broker representing either party in the sale, but said to the best of his knowledge, the so-called Zuckerberg sale displays the signs of being a residential with moderate improvement but not for an investment property. The property happens to be a lot with a development right obtained over the years, but it also offers some privacy, and Kauai has demonstrated a willingness to give breathing room to celebrities visiting and living on the island.

“He is not a real estate developer,” O’Connor said. “His purchase, I think, exemplifies an affinity with the land and with the people of Kauai. He should be welcomed into the neighborhood and given his space.”

Land deeds

The state Bureau of Conveyances listed the parties involved in the land deed transfers but does not list the price of the sale. The county tax assessment website lists the price but it can take several weeks after the transaction appears on the BOC for it to be listed on the county site.

The BOC recorded a sale from Koa Kea International to Pilaa 400 LLC on Sept. 12. Sara S. Jehn was the manager who signed for Koa Kea, and the Honolulu law firm of McCorriston Miller Mukai MacKinnon was listed for Pila 400.

The BOC recorded a sale of the former Kahuaina plantation from Falko Partners LLC, to Honolulu-based Kahuaina Holdings on Sept. 21. Falko, based in San Mateo, Calif., held the Kahuaina deed under the partnership, “Kauai My Legacy,” for the plantation land that sits adjacent to Pilaa.

The Kahuaina plantation is a 357-acre property that had been subdivided for 80 luxury homes of up to seven acres a piece. The Pflueger four parcel Pilaa sale covers an area of 383.271 acres, with 10.8 percent remaining interest held by an owner who was not party to the sale.

Three smaller properties in Pilaa total 3.61 acres and are likely transfers under the Kuleana Act. A non-exclusive AU-2 easement is listed for Ricard Marvin III, Nicholas Fred Marvin and Barbara C. Nelson, trustee of the Barbara C. Nelson Family Trust, who retain access to their Kuleana Act property.

A non-exclusive grant of easement includes the location of a seaward boundary in accordance to the state, and a shoreline setback line in accordance with the county.

There shouldn’t be any remediation issues left with the purchase, O’Connor said. The Pflueger portion was quietly marketed and certainly wasn’t touted and destined to be sold off.

The 10 percent Pilaa land holder is likely an associate of Pflueger who already owns a portion of the property and did not wish to sell. The co-owners will need to come to an understanding as to the possible division of the property so that it will be a Condominium Property Regime or subdivided as a specific piece of property.

“This is all zoned agriculture and Zuckerberg bought it and will have an ag pursuit of some type out there,” O’Connor said.

Benefits to Kauai

As a member of the Kilauea Neighborhood Association, Pickett said there is a long-standing concern on the board about public access through the properties to trails and beaches. KNA was in negotiations with the previous plantation owner, Falko, and he said KNA will be interested in establishing communications for a mutually beneficial relationship.

The plus for Kauai is that Zuckerberg has drawn considerable attention to the island. His purchase might inspire others to look at property or just to visit the island where the billionaire built a home.

The price of real estate is going up and there is has an overall effect when investments of this type are made. Between this 700-acre sale in Kilauea, and the 1,100- acre sale of Princeville land to Dr. Chanchai Ruayrungruang’s Reignwood Group, the hundreds of millions of dollars spent will have an impact.

“You can’t have an investment that size without having a positive effect overall on the valuation of property on the island,” O’Connor said. “It may not be direct or immediate, but it is absolutely getting other peoples attention and will inevitably attract more people here, certainly not to buy title to big pieces like that, as there is not a lot left, but it will impact in a lot of ways.”

The positive way to look at the difference in the two sales are that the Princeville sale will bring more housing to a visitor destination area where it was intended to develop, he said.

The Kilauea purchase will result in a low impact on an undeveloped area that preserves the character of the land and Kauai, which is also ultimately good for the economy, he said.

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