Castle & Cooke Plans Hotel Development on Lanai, Murdock Says
The Hawaiian island of Lanai, which for many years has been a vast vista of growing pineapples, will be transformed with a luxury beach resort by a strengthened Castle & Cooke if the company’s new chief executive and major shareholder, Los Angeles financier-developer David Murdock, has his way.
After touring the sixth-largest island in the Hawaiian chain following Castle & Cooke’s merger with Murdock-controlled Flexi-Van, the entrepreneur said in a telephone interview earlier this week from Honolulu that he is developing a master plan for the 90,000-acre island that will include two hotels, one of them a “very fine resort hotel” with grounds landscaped throughout in a Hawaiian motif.
Lanai, of which Castle & Cooke owns 98%, thus will be added to the Hawaiian tourist market along with the larger islands of Oahu, Maui, Kauai and Hawaii.
May Sell U.S. Land
The 104-year-old Castle & Cooke, which merged with Flexi-Van to solve its multiple financial ills, will sell much of its land on the U.S. mainland, Murdock said in the interview.
These holdings include about 6,600 acres in California--2,450 acres at the Sea Ranch development on the Northern California coast, 3,300 acres in San Jose, 350 acres in Camarillo Springs and 500 acres at the MountainGate development in West Los Angeles.
The company also owns another 60,000 acres on other Hawaiian islands, most of it under crops, including lettuce.
However, Murdock was reluctant to outline the future of Castle & Cooke’s vast fruit and vegetable growing operations. The best known of these are Dole pineapples and bananas, which he said constitute about 45% and 35%, respectively, of the world’s output.
Although the financier had been quoted earlier as saying he did not intend to dispose of all of Castle & Cooke’s food operations, Murdock said when asked in the interview about his plans for those assets and other agricultural operations: “I wouldn’t really want to comment on it at this time. We will look at all the assets.”
His priorities were evidenced early, when Castle & Cooke made application Monday for zoning the Lanai land for resort development.
It was the same day that Castle & Cooke shareholders approved the merger with Flexi-Van, a New York-based transportation-equipment leasing firm, which now becomes a subsidiary of Castle & Cooke.
New Credit Agreement
Murdock, whose broad array of holdings include the prestigious Hay-Adams Hotel in Washington, many real estate developments and textile manufacturer Cannon Mills, said he believes the problems of Cooke & Castle “are behind them” as a result of the merger.
The company announced the execution of a new $260-million credit agreement with a syndicate of banks led by Morgan Guaranty Trust and First National of Boston.
Of that total, up to $160 million will be a term loan to be used with Castle & Cooke’s available cash to repay its former lenders, and $100 million will be a revolving credit to be used for working capital.
Castle & Cooke said 76% of its shareholders and 77% of Flexi-Van’s shareholders voted for the merger. Each outstanding share of Flexi-Van common stock was converted into 2.222 shares of Castle & Cooke common and 1.111 shares of Castle & Cooke 90-cent convertible preferred stock.
In addition, Castle & Cooke declared a stock dividend payable July 22 to shareholders of record July 1.
Murdock became chairman and chief executive of Castle & Cooke, assisted by a new office of the chairman. Members of that office are Robert D. Cook, who will continue as president and will become chief operating officer, and two veteran Murdock lieutenants, Raymond F. Henze III and Harold M. Messmer Jr.
Henze and Messmer also will serve as executive vice presidents. Henze has served as president and chief operating officer of Flexi-Van since 1983.
