The developer from California had big plans: He wanted to transform nearly 2,000 acres that surrounded the Maui Tropical Plantation, for decades farmed for sugarcane, into a new development of 1,500 homes, spaces for shops and restaurants, parks and farmland, where future residents could grow their own food.

Maui County locator map

Mike Atherton said he was told early on by the county councilman serving the area, Mike Victorino, who’s now Maui County’s mayor, that if he wanted a shot at creating his “21st century country town,” he’d need to have the community’s support.

After he and his business partners began buying up property in Waikapu around 2005, he set aside 900 acres to be forever preserved for agriculture. He rented land to Hawaiian farmers with 30-year leases so they could apply for grants to grow their businesses. He also set aside more than 80 acres for parks, donated 5 acres for a Hawaiian immersion school and promised to reserve space for a public elementary school.

Unlike many real estate investors who flock to Hawaii to turn a profit, living thousands of miles away from the places their projects are poised to upend, Atherton also chose to live in Waikapu.

Mike Atherton drives his Polaris in the rural swath of land poised for hundreds of new homes.
Mike Atherton drives his Polaris in pastures that will be developed into new homes. Marina Riker/Civil Beat/2022

The developer, then in his 60s, moved into a loft tucked inside the plantation’s gift shop, a destination that attracts tens of thousands of visitors each year. There wasn’t much privacy, Atherton said, “but the store closed at 6 o’clock, so there wasn’t any noise at night.” Eventually, the county found out, and he had to move. “You can’t live in a commercial space — it’s a conflict with the code,” he knows now.

That was almost 15 years ago, and today, the 73-year-old knows a lot more about what it takes to follow Maui County building regulations: His project to build 1,400 homes has cleared a decades-long planning process, arduous environmental reviews and a slew of community and government meetings, without a single “no” vote.

The plan for Waikapu Country Town in Central Maui includes affordable housing, farm lots, schools and parks. Courtesy: Waikapu Country Town

Instead, many neighbors who’d initially been wary of the real estate investor showed up at meetings to tell government officials they wanted his vision to become a reality. One Waikapu resident, on the board of the community association at the time it was approved by the County Council in 2019, called the project “the new standard of how communities really should be created.”

“I want this in my backyard,” Barry Helle, another resident, told council members. “I think it’s the right thing for Maui as a whole.”

It’s rare for a project of that scale to garner such widespread community support. And yet, nearly 18 years since Atherton started planning Waikapu Country Town, it could still be years before families get the keys to the new homes, and all this at a time when Maui’s shortage of housing has reached a new crisis level.

Earlier this month, Maui’s mayor asked the county to form a public-private partnership with Atherton, a move that could bring the start of construction within the next year or so. Until then, Atherton was planning to build a private wastewater treatment plant — a massive facility that cleans sewage — that would serve only his development at a cost of tens of millions of dollars.

Now, Maui County is offering to build a bigger plant, with an estimated pricetag of about $87 million, that could eventually serve other communities, not just Waikapu, according to Victorino. The county needed a new one, anyway: The existing plant in Kahului is nearing the end of its life and is located in a tsunami zone.

In exchange, Atherton agreed to provide more land so the government could also build a middle school, next to the elementary school already planned. Currently, Central Maui has one of the largest middle schools in the state and needs another campus. The developer also agreed to build 213 additional “affordable” homes, bringing the total number in his development to 500. He must limit their sales prices based on families’ income, which can mean selling houses for less than what it costs to build them.

Because prices are so high on Maui, an “affordable” three-bedroom home can run between $500,000 and $700,000, according to cost guidelines set by the county and federal governments. That figure could change by the time the homes are built.

The project, the county said, is set to be the largest housing development “in decades.” Still, even if it’s built in the next five to seven years that officials estimate, it won’t come soon enough to make a big dent in the projected demand: Maui needs 10,000 homes by 2025 to keep up, according to a recent state study.

“If done correctly, we’ll have wonderful communities for our people to live here, work here and raise their families here in Maui — so sometimes the wait is worth it,” the mayor said, adding that the lack of housing inventory is because the county has been behind in building generally, not just affordable housing.

The land surrounding Maui Tropical Plantation is set to be developed into 1,400 homes. Marina Riker/Civil Beat/2022

The cause of the shortage is complicated. Housing policy experts say it goes as far back as the 1980s, when the feds first slashed government-subsidized housing programs. In more recent decades, some economists have blamed Hawaii’s onerous building and permitting regulations, and since the advent of sites like Airbnb, residents have pointed to long-term housing stock converted into vacation rentals. Another factor, some locals say, is harder to quantify: the widespread distrust in development, in general, as residents watched neighborhoods transform over the years with homes they can’t afford.

Then, the pandemic struck. After thousands of Maui residents lost jobs in a tourism-dependent economy, a flood of out-of-state buyers — often offering cash, over the asking price — drove property prices to record highs.

A recent analysis by a Hawaii Appleseed researcher found that 70% of homes sold in 2020 went to investors or second homeowners, up from about 50% five years ago. In the last two years alone, the median sales price shot up by more than $380,000 — more than what a typical Maui household makes over the course of four years, according to census estimates.

On Friday, the same day that the Maui County Council agreed to take the first step in approving the Waikapu Country Town’s public-private partnership, the front page of the Maui News read: “Median sales price reaches $1.16 million.”

“We have a crisis,” Atherton said. “How can a local family afford $1.16 million?”

‘What Is Best For My Community’

It all started for Atherton in 1979, when he bought a lot for $17,000 in Manteca, California. He’d been trading turquoise in South Lake Tahoe before that. But then he got a construction loan, built a 1,400 square-foot house and sold it for $49,950. That’s when he thought, “Holy smokes, that wasn’t that hard.”

Over the decades, he and his partners — three other developers from California and now his son, who’s in the construction business — built 3,700 units, he said. At the same time, he ran a coffee business in Nicaragua, eventually reserving half the property for a rainforest preserve, according to planning records. After civil unrest there, he bought a coffee farm on Molokai in the early 2000s. He came across the Maui Tropical Plantation while searching for more land for coffee.

He doesn’t act like a typical real estate investor. In Waikapu, many know him as “Coach,” an old nickname from college. His office is a small room tucked between other kiosks where local artists sell goods at Maui Tropical Plantation, and these days, he almost never leaves the property. He spends his time rumbling around the dirt roads in his Polaris, chatting with employees and answering community members’ calls about the housing project.

Developer Mike Atherton has been working for nearly two decades to build Waikapu Country Town on former sugarcane lands in Central Maui. Nathan Eagle/Civil Beat/2022

“He comes from a family who cares about what he leaves behind,” said Dale Zarrella, a painter and sculptor who has an art studio on the property.

The artist paused, then added: “It’s not common for a developer.”

Unlike the others who came to Central Maui, community members said Atherton listened to them. Farmers on the land are now growing crops like ulu, bananas, kalo and sweet potatoes and raising hogs and cattle. Nestled at the base of Mauna Kahalawai, Waikapu has been home to thriving Hawaiian communities for generations.

But for decades, a sugar plantation controlled Waikapu and diverted water from Hawaiian families who needed the resource to grow wetland taro. When sugar operations ceased, C. Brewer & Co. began selling off the land — and water rights — to developers, like Atherton. But as his neighbors fought legal battles to restore water to their ancestral lands, Atherton tried to mediate.

Years ago, when Mike Atherton first moved to Maui Tropical Plantation, he lived in the gift shop — until the county found out, and he had to move. Marina Riker/Civil Beat/2022

Crystal Smythe, 62, can trace her family’s roots in Waikapu to the 1860s. Her family served as the land’s original conservation officers, and today, she’s among the descendants fighting the Wailuku Water Company, formerly the Wailuku Sugar Company. After a court ruled the company had to restore water flow, she said Atherton helped lay the pipes needed to get the water flowing again.

Although the development will drastically change the land around her, Smythe said she has even greater fears — that without access to housing, the diaspora of Maui’s longtime families will continue, changing the fabric of the community. Of her own four children, only two of them live on island; the other two are on the mainland, where the gap between salaries and housing costs isn’t as vast.

“I’m not about not-in-my-backyard,” Smythe said. “I’m about what is best for my community.”

Maui Tropical Plantation opened in Waikapu in the early 1980s. Nathan Eagle/Civil Beat/2022

History tells her, however, to remain skeptical. She doesn’t want to see a repeat of what happened in other parts of Central Maui, a swath of land filled with Hawaiian burial sites. Maui Lani, a massive development planned for decades, became the battleground of a fight between Hawaiian descendants and developers accused of mining sand and desecrating iwi kupuna.

It’s not a matter of if they find bones in Waikapu, it’s when, Smythe said. The developer must have a plan.

Other community members have different reservations. If the county is putting millions of dollars into the sewage plant, will existing Waikapu residents with cesspools get help connecting to sewer lines? What will be done to ease traffic with all the new people? How many of the homes will be bought by local families?

And, when Atherton is gone, who will keep his promises?

“I don’t want people to get left behind,” said Travis Polido, whose family has lived in Waikapu for at least three generations. Despite his concerns, he, too, wants the project to move forward.

The Dire Need For Workforce Housing

In recent years, Hawaii has been among states where population has decreased — and of those leaving, many are young and educated, a phenomenon known as the “brain drain.” Even among those working relatively high-paying jobs that require college degrees — like nurses and doctors — it’s hard to find homes within financial reach. Maui’s new police chief, for example, just asked for a pay hike of more than $35,000, citing in part the high cost of living.

“The need for housing for our health care workers is now beginning to be in a crisis situation,” said Vince Bagoyo, a member of Stand Up Maui, a nonprofit that advocates for affordable housing. “We can’t hire enough workers because of housing.”

Although the local college has a nursing program, it doesn’t produce enough to keep up with the hospital’s staffing vacancies, said Bagoyo, who also serves on the board of the hospital’s foundation. The crisis has even reached his church, a five-minute drive from Atherton’s proposed development.

Developer Mike Atherton has been working for nearly two decades to build Waikapu Country Town on former sugarcane lands in central Maui.
Developer Mike Atherton’s development calls for a mix of affordable homes and larger rural lots. Nathan Eagle/Civil Beat/2022

Lately, Bagoyo said, he’s had to preach because the old pastor retired, and the church has struggled to recruit a new one. The problem is, pastors don’t make that much, Bagoyo said.  He recently found a pastor who might be interested — and an available one-bedroom rental — but he worried, “Can this pastor afford $2,000 a month?”

With the soaring prices of construction materials and land, Bagoyo is among local housing advocates who say Maui’s best hope is to develop its own affordable housing. He directed the county’s housing department in the 1980s, at a time when the county undertook similar projects by tapping private developers to build homes on its land; Skill Village in Paia is one example.

Maui County recently set a goal to build 5,000 new affordable housing units by 2025, which housing advocates say can only be met if the government drastically ramps up production on county-owned properties.

Kenna StormoGipson, the housing policy director for Hawaii Appleseed Center for Law and Economic Justice, said local families simply can’t compete with outsiders in today’s market. Private developers haven’t kept up: In 1990 Maui issued 3,534 building permits — a figure that’s dropped steadily over the years, down to 1,348 in 2017, according to a recent state study.

Today, the lack of housing stock for residents is so dire that Hawaii’s Republican Caucus introduced a bill this session that aims to create “a separate local housing market.” The bill proposes to keep homes built with government funds price-controlled forever, “to build an inventory of housing that will always be affordable to the local wage earner.”

“When you have the Republican Party saying that, it says something,” said StormoGipson.

Mike Atherton is planning to build a home for himself deep in the valley. Marina Riker/Civil Beat/2022

If the county pays the cost of construction, it’s legally able to prioritize that housing for local residents. One of those projects, according to the mayor, could go next to Atherton’s development — the county owns land there and plans to build rental housing.

Today, Waikapu is made up of a thousand homes, but community plans call for thousands more to be built there in the decades to come. Standing on the land above Maui Tropical Plantation last week, where his own development will go, Atherton gestured to the land beyond his property line, in Maui’s Central Valley.

“That’s the future down there,” he said.

But all that will take years, Atherton said, because government moves slowly, especially in Hawaii. When he first began planning Waikapu Country Town in the early 2000s, his consultants told him it’d take 10 to 12 years — a process that would take him four to five years in California.

“I told them, ‘You’re out of your mind,'” the developer recalled. “But it did. They told me the straight scoop.”

Atherton is hopeful that Maui’s government leaders might streamline the process for developments that produce affordable housing and meet all of the community’s existing plans. The current County Council is “very tuned in,” he said, and that helps.

Until his project breaks ground — he’s hoping at the end of this year — he’ll continue managing the plantation. He also tends a herd of 100 Texas longhorn cattle that graze in a pasture, up above the restaurant and gift shop. Every once in a while, Atherton sends one to the butchers to make hamburger, but mostly, he keeps them “for ambiance.”

Eventually, when the homes are built, the cows will have to move. And that’s when Atherton will move into a home, too, where he plans to live out the rest of his days. He already has a spot picked out, “way up top,” he says, pointing to the mountain.

He smiles, then adds: “All the way up.”

Civil Beat’s coverage of Maui County is supported in part by a grant from the Nuestro Futuro Foundation.

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