Barnwell Industries Inc. has increased its ownership of a Big Island land development business, Kaupulehu Developments, to 77.6 percent, from a slim majority of 50.1 percent. Barnwell boosts
By Russ Lynch
stake in Big Isle
development
Star-Bulletin
Honolulu-based Barnwell, which gets most of its income from oil and gas exploration and development in Canada, also has development opportunities on more than 2,000 acres of the Kaupulehu Development leasehold land in Kona, surrounding the Kona Village and Four Seasons resorts.
Cambridge Hawaii LP, its minority partner in the ownership of the master lease for the 2,100 acres, has agreed to sell more than half of its 49.9 percent minority position for an undisclosed price, Barnwell said yesterday. Cambridge Hawaii, a group of mostly Canadian investors who have worked with Barnwell for years, is left with a 22.4 percent holding.
Barnwell has said it hopes to develop residential and golf projects on the land, which is makai of the Queen Kaahumanu Highway. Development has been held up for a time because of a dispute about the company's proposed development of about 1,000 acres.
The state Land Use Commission approved Kaupulehu's application to put 1,000 acres into urban district classification to allow resort-residential development but the decision was challenged in a dispute over native Hawaiian rights.
The Hawaii Supreme Court has since sent the matter back to the Land Use Commission and Barnwell said a final decision is awaited.
Meanwhile, Kaupulehu Developments has sold options for several smaller parcels to Japan-based Kajima Corp., the owners of the Four Seasons Resort Hualalai. Some of those options were exercised last year, adding $3 million-plus to Barnwell's income.
Barnwell's shift to a more-solid majority in its control of the remaining land reflects its optimism for the future of land development in Hawaii, the company said.
"We consider this ability to acquire a portion of the minority interest in Kaupulehu Developments a significant opportunity for the company, which complements our oil and gas contract drilling segments," Barnwell Chairman and CEO Morton H. Kinzler said in a statement yesterday.
He said the acquisition is being funded entirely from Barnwell's cash flow. Record gas prices have brought the company record profits over the past year.