Ranch Requests Quarter Million in Property Tax Breaks

Says Kaluakoi Hotel worth $315,000.

By Molokai Dispatch Staff

Molokai Properties Limited (MPL), known as Molokai Ranch, got rid of its biggest operational expense when it closed down and terminated its employees in March. Now MPL management is trying to continue cutting expenses by appealing over 72 of its property tax bills received from Maui County for 2008.

If MPL management is successful with its appeals, it will save over $250,000 in property tax payments it makes to the County.

Depreciated Values
In 2007, MPL appealed taxes on nine properties assessed by the company at $22,899,600. In appeals documents, MPL claimed the properties were only worth $16,512,900. In 2008, the company is claiming that the same lands have depreciated to $6,255,570, according to 2008 appeal documents.

Last week the County’s Real Property Tax Board of Review traveled to Kaunakakai to hear appeals from a number of Molokai landowners including MPL for 2007 property tax bills.

Dan Orodenker, General Manager for MPL, appeared briefly at the meetings and advised the Board that MPL was withdrawing its 2007 appeals on all nine properties.

He offered no definitive reason for the withdrawal.

The Board of Review will return to Molokai at a later date to take up 2008 appeals.

One of the nine properties is the Kaluakoi Hotel, which was closed in 2001 and has been allowed by MPL to continue deteriorating. For 2008, the County valued the 18 acre hotel site and buildings at $5,867,600. MPL is appealing, and claims the hotel property should only be valued at only $315,290, less than the cost of an average single family home on Molokai.

If MPL is successful with its appeal, the property taxes on the hotel property for 2008 will be only $545.88, according to County records. The tax would be less than what many residents living in Kaunakakai’s Ranch Camp subdivision pay on their modest single family homes.

Uncontested Properties
Despite MPL filing over 70 property tax appeals with the County for 2008, there are many properties over which MPL is not challenging the County.

One property is the 6,348 acre La’au Point parcel for which MPL is planning a controversial 5-mile coastal development. In 2006, MPL reported to investors that the La’au parcel was worth $14,910,000.
The County has the property currently assessed at only $147,400. MPL’s 2008 tax bill for La`au is $1,091. This is substantially less than what many Kaluakoi residents are paying on their individual homes and condos.

MPL is not contesting this tax bill.

MPL’s now-defunct 30-acre Kaupoa Beach Village site is also not being contested. While it appraised in Ranch figures for $5,380,000 a few years ago, the County has it valued at only $105,400 in 2008. MPL’s property tax bill for this property is a mere $474 for the year.

A State of Decline and Few Remaining Trees
Before the shutdown of operations in March, MPL had warned of a “doomsday” scenario should it be unsuccessful in developing La`au Point. Indeed, since shutting down operations, MPL has allowed its oceanfront properties to fall into disrepair.

Most of the trees on the Kaupoa property have died, and what little else on the property remains similarly continues to deteriorate. At the company’s Kaluakoi Hotel, sidewalks are falling into the sea while hotel rooms host stray cats and beehives.

In a correspondence to homeowners, MPL has told residents that the company will be cutting down the remaining coconut trees because of liability issues and because MPL does not have the funds to keep the trees trimmed.

Kaluakoi condo owners are circulating an “adopt a tree” letter, however, and residents are being asked to contribute $70 per remaining tree every nine months for trimming and debris removal. The donation will be paid to MPL.

“It’s very important we do what we can to save the remaining trees. Once they are cut they will not grow back in our life times,” wrote West end resident Jeff Kent, who has already contributed $840. The sum will keep MPL from cutting 12 trees. In the letter Kent said there were approximately thirty trees remaining.