The owners of Molokai Ranch have backed out of plans to lease thousands of acres of land to a large-scale wind farm developer.

The decision likely spells the end for the Molokai portion of the Big Wind project, an ambitious plan to build about 70 wind turbines on both Molokai and Lanai and bring the electricity to Oahu via undersea cables.

Clay Rumbaoa, CEO of Molokai Properties Ltd., commonly known as Molokai Ranch, said in a statement to Civil Beat that the company has broken off negotiations with Molokai Renewables, the wind farm developer, and is focusing on its ranching operations instead.

“After much consideration and discussions with Molokai Renewables, we made the decision not to renew the agreement for the proposed wind farm project on Molokai Ranch lands at this time,” wrote Rumbaoa. “ Our focus is currently on ensuring the success of our newly re-launched ranching operations and our efforts to re-open existing facilities, such as the Maunaloa Lodge, in an effort to create opportunities for the island.”

Rumbaoa declined an interview request for this story and a company spokeswoman did not immediately respond to follow-up questions about whether a wind farm was still a future possibility.

But unless Molokai Ranch changes its mind soon, it’s unlikely that a wind farm on Molokai will be built anytime in the near future. Hawaiian Electric Co. is expected to release a long-awaited contract for renewable energy by mid-year that Molokai Renewables has spent the past two years preparing to bid on.

Executives for Molokai Renewables, a joint venture between San Francisco-based Pattern Energy and Bio-Logical Capital, which has offices in Honolulu, San Francisco and Denver, did not respond to an interview request. But Guy Kaulukukui, who heads Bio-Logical Capital in Hawaii, said in a statement to Civil Beat that the ranch’s decision is unfortunate.

“While we are disappointed with Molokai Properties’ decision not to move forward with our proposed wind farm project on Molokai Ranch lands, we respect their decision,” he wrote.

Kaulukukui said that Molokai residents could have benefited from perks that went along with the wind farm, including projects to restore and conserve land, protect the island culture and enhance ocean resources and local food production.

Wind Farm’s Torturous Path

The decision by Molokai Ranch ostensibly ends five years of attempts by developers to move the Molokai portion of the Big Wind project forward at a cost of millions of dollars in studies and pre-development costs.

HECO alone spent at least $7 million in Big Wind studies that total hundreds of pages, according to state documents. This is in addition to millions spent by the state and wind farm developers.

The Lanai portion of the project is still viable. But it too is facing hurdles.

Molokai Renewables is not the first company to try to build the Molokai wind farm.

Boston-based First Wind was the original developer for the project and had an agreement with HECO dating back to 2007 to purchase the wind energy. However, First Wind missed a critical March 2011 deadline to obtain land for the project. The company said that it made numerous unsuccessful offers to the ranch and its parent company, Singapore-based GuocoLeisure Ltd., an international investment firm with holdings in luxury hotels and properties, oil and gas and a London casino.

By this time, Gov. Neil Abercrombie had intervened in the growing dispute over the wind farm, threatening Molokai Ranch with eminent domain if it stood in the way of the project moving forward — so long as the community wanted it.

Subsequently, Peter Nicholas, the former CEO of Molokai Ranch, said that while he wouldn’t work with First Wind, he would work with Pattern Energy. The two companies entered into an agreement for the use of the land.

But state regulators said that Pattern Energy couldn’t just be substituted as the Molokai wind farm developer. Instead, the PUC told HECO it had to rebid the Molokai portion of the project. Commissioners had earlier ruled that the Big Wind project had never been properly bid, but had allowed it to proceed because they said it was in the best interest of the state.

The anticipated contract, to the frustration of energy developers, was supposed to be released a year ago. It’s attracted interest from energy and cable companies that can now bid on a range of renewable energy technologies, including solar. The projects can be built on any island that can reach Oahu by an undersea cable or on Oahu itself.

Molokai Renewables had hoped to be the winning bidder.

Molokai Ranch Could Face Renewed Battle Over Land Development

From the beginning, the proposed Molokai wind farm met stiff resistance from local residents. I Aloha Molokai, a community group that has led opposition, cheered the decision by Molokai Ranch not to move ahead with the wind farm.

“We are delighted and maybe the ranch can get on with other more practical projects that involve the community,” said Larry Tool, a member of I Aloha Molokai.

Kanohowailuku Helm, the group’s president, said that he is still worried that a developer might try to build a cable to Molokai that would connect island electrical grids, even without the wind farm.

“That’s good news for us, but it doesn’t mean that we are going to back off on opposing the cable,” he said. “If the cable is still on and they plan to still try to hook up Molokai with the cable, we will have to be ready for that.”

Helm said that I Aloha Molokai hoped to work with the community and Molokai Ranch in looking for other options that would generate revenue for the ranch.

But some residents now worry about how Molokai Ranch plans to make money if it’s not off of a wind farm and are concerned that battles over luxury property development could be rekindled.

For years, residents fought a plan by Molokai Ranch to develop 200 high-end homes along hundreds of acres at Laau Point, a stunning expanse of undeveloped oceanfront property. GuocoLeisure Ltd. marketed the properties as an exclusive enclave for millionaires.

But many residents, who hold tightly to their subsistence lifestyle and traditional island culture, fought hard against the development. In 2008, after a years-long battle, Molokai Ranch shelved the plan. The ranch was losing several million dollars a year on operations, according to news reports. It shut down the ranch’s cattle operations, Molokai Lodge, Kaupoa Beach Village, Maunaloa’s only movie theater, the Kaluakoi golf course, its rodeo arena, restaurants, gift shop and gas station. Local residents said it was a vindictive move.

GuocoLeisure Ltd.’s 2012 annual report to investors says that it “is embarking on a new four-pronged strategy to deliver value on the island,” which includes ranching, agriculture and property development, as well as the now shelved wind farm project.

It’s the potential for property development that has some locals concerned.

Walter Ritte, a long-time community activist on the island, said that there could be a lot of upcoming battles in store for Molokai residents.

“The ranch now is going to have to find another way to make their money on Molokai,” he said. “I think the landowners felt that the windmills were going to devalue their land, so I hope they are not thinking about following Lanai’s lead and start developing golf courses and hotels.”

He said he would prefer the windmills.

“If I had to choose between windmills and hotels, I guess I would go with something that is not as bad as hotels and golf courses,” he said. “But neither of them really has support on Molokai right now.”

Read the full statements from Molokai Ranch and Molokai Renewables.

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