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Tuesday, December 19, 2000


Tech moguls
buying into
isle real estate

Fred and Annie Chan quietly
have invested $40 million in
the Kaiser Estate, Kapiolani
land and the high-tech
Ohana Foundation


By Russ Lynch
Star-Bulletin

Fred and Annie Chan, the University of Hawaii graduates who made a fortune in the high-technology business in the San Francisco Bay Area, have invested more than $40 million in Hawaii real estate, including the Kaiser Estate in Portlock, state records show.

While they were developing the nonprofit Ohana Foundation, which they founded in 1998 to create new and versatile ways of linking students in their classrooms and homes with the best worldwide sources of information, they were putting their own money into Hawaii.

First came the $5 million purchase in mid-1997 of the four-story boathouse and dock of the Kaiser Estate, more recently known as the Goldman Estate.

Second came the July 1998 purchase, for $26 million, of the six-acre former Rainbow Chevrolet location on Kapiolani Boulevard, near McKinley High School. The property had been acquired 10 years earlier for $38 million by Asahi Jyuken Hawaii Inc., the local arm of a Japanese business that invested in Hawaii land and hotels not long before the Japanese investment "bubble" burst.

Next, in March of this year, they bought the legendary Henry J. Kaiser mansion and nearly two acres of the Kaiser Estate for $9.6 million.

The Kaiser properties became available after billionaire Japanese investor Gensiro Kawamoto gave up in protest of a $1 million-a-year lease bill from land owner Kamehameha Schools and simply turned over the property to Kamehameha, then called the Bishop Estate.

After a failed auction attempt in 1997, the estate broke it into three parcels and offered them fee-simple.

The Chans bought two of the parcels, making up the majority of the property.

All of the Hawaii property purchases were through family trusts and partnerships using the name "Evershine," such as in Evershine VIII and Evershine X. State records in Hawaii and California show the trusts are mainly for the benefit of Fred and Annie Chan and their children.

Annie Chan, the official representative of the trusts in the real estate documents and also president and chief executive officer of the Ohana Foundation, could not be reached for comment.

Honolulu attorney Raymond Iwamoto, who represents the Chans, said she is not ready to talk in detail about the foundation and doesn't want to discuss the real estate investments, which are family business aside from the foundation.

He said, however, that the Chans plan to use the Kaiser property as the family residence.

Kawamoto, known for his cash buying spree of Oahu residences, purchased the entire 7-acre estate and all its buildings for $38 million in 1988 from the Goldman brothers, Alfred and Monte, heirs to a fortune from their shopping cart inventor father.

In 1994 Kawamoto ceded the property to Bishop Estate.

Most recently, the last of the three parcels, the guesthouse, was sold for $5.1 million earlier this month to an undisclosed buyer in Nevada.

The Rainbow Chevrolet property, bounded by Kapiolani, Piikoi, Pensacola and Kamaile, has a colorful price history as well. Asahi Jyuken paid $36 million for it in 1988. A company called UP Corp. paid $85 million for it in 1995 and said it was considering it for an assisted-living residential project.

The Chans' attorney, Iwamoto, said yesterday that his clients had some plans for the Kapiolani property that seemed near fruition but didn't work out, so the Chans are still in the planning stage for that piece.

"Both Fred and Annie are UH alumni who have been successful on the mainland and who want to bring some of their money back and invest in Hawaii," Iwamoto said.

They are key players in a Fremont, Calif., company called ESS Technology Inc. (www.esstech.com), which developed new computer chips that the company says speed up audio and visual communications, allowing such uses as 3-D pictures and hi-fi sound on computer screens with multiple connections around the world.

Securities & Exchange Commission records show the Chans as holders of 12 million ESS shares, or 29 percent of its stock. The stock has fallen along with other high-technology, Internet related issues and is trading for about $6 a share but it has been as high as $39.

The Chans are reluctant to talk much about Ohana Foundation since they want to announce its plans early next year in a way that all can understand, say sources close to them.

The Ohana Foundation's Web site, www.ohanalearning.org, tells some of it. One of the keys is their Internet-connected digital video disk player that will allow students to look at the latest information available on disk and through the Internet and communicate with worldwide sources and their own schools and homes.

ESS Technology has developed an economical machine to do that, without requiring a personal computer, the Web site says.

Already the foundation has recruited some big-name people. Annie Chan is listed as president and chief executive officer.

Phil Bossert is the vice president, education. He worked as an educator and later executive of high-technology businesses, and most recently was a deputy director of the Department of Business, Economic Development & Tourism. Recent Ohana hires also have included Frank Haas, former managing director and CEO of advertising agency Ogilvy & Mather Hawaii, who is vice president, marketing, for the nonprofit foundation.



Ohana Foundation



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