November 14, 2013
Challenge settled, sale of Kailua land advances
A Castle
descendant's claims on the merits of the real estate sale have been sorted out
The $262 million
sale of Oahu real estate assets of Kaneohe Ranch Co. and the Harold K.L. Castle
Foundation moved forward Wednesday after one beneficiary settled a legal
petition that raised concerns that the deal was being rushed and hadn't been
properly vetted.
The sale involves
roughly 600 acres, including about half of downtown Kailua, Kaimuki Shopping
Center, Windward City Shopping Center and Pali Palms Plaza and agricultural
land.
The petition filed
by Jeremy C. Baldwin in Circuit Court was settled without a hearing Wednesday
after about two hours of private talks involving Judge Derrick Chan.
The settlement
allowed the descendants of Harold K.L. Castle to go ahead with a vote on whether
to accept the offer from an unidentified public company, according to Michael
Rudy, a local attorney representing Baldwin. It was not clear whether the vote
took place Wednesday nor the result of the vote.
Rudy said Baldwin
was pleased with the petition's resolution. "We're happy with the
settlement," he said. "Our needs were addressed."
Baldwin filed the
petition seeking postponement of the vote, alleging that Bank of Hawaii, the
trustee for 26 local family trusts with stakes in the real estate assets, didn't
do enough independent analysis on the merits of the proposed sale to an
unidentified public company.
The petition said
the bank, which recommended sale approval and gave beneficiaries just a few
days' notice to decide, relied too heavily on an analysis and recommendation by
Kaneohe Ranch, whose employees stand to be rewarded greatly in the sale.
Mitch D'Olier,
president and chief executive officer of Kaneohe Ranch Management Ltd., would
receive an estimated $13.2 million through the sale, according to a summary of
the transaction. Other company employees would share $1.8 million. Carlton Au,
the firm's chief financial officer, would receive $298,122, the summary
said.
Bank of Hawaii
declined to comment on the petition. D'Olier declined comment.
A collection of
mainland real estate also marketed for sale is not part of the $262 million
deal. The transaction summary said Kaneohe Ranch is retaining the mainland
portfolio valued at $160 million at this time.
The land being
sold stems from the assets of Harold Kainalu Long Castle and his wife, Alice
Hedemann Castle. Harold Castle bought 9,500 acres in the Kailua area in 1917,
and helped establish the town by donating land for churches, Castle Hospital,
schools including Castle High School and Hawaii Loa College, and the land that
became Marine Corps Base Hawaii.
Castle died in
1967 and left some of his assets to a private charitable foundation in his name,
while other assets were passed to descendants in the form of Castle family
trusts.
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