Hawaiian paradise controlled by billionaire Larry Ellison is hit hard by COVID

As Covid-19 swept across the U.S. mainland in the spring and summer, Lanai didn’t have a single case. Its 3,000 residents avoided mass layoffs while tourism plunged, protected by the billionaire who owns 98% of the island.

Now, the gorgeous paradise, about 2,500 miles southwest of Los Angeles, is confronting a tough reality.

Ellison’s two Four Seasons resorts, which employ nearly a quarter of the island’s residents, laid off or furloughed almost all workers in August. Some employees returned last month for a reopening to tourists — which was then followed by a wave of virus infections. More than 100 people tested positive for Covid-19 in the last two weeks of October. Four have been helicoptered off because Lanai’s lone hospital isn’t equipped with a critical care unit.

“They’re going through what we went through in March and April,” said Michael Shea, chief medical officer of Maui Memorial Medical Center, who visited Lanai on Nov. 2 with two employees of the Centers for Disease Control and Prevention. “They can see it in the news, but actually experiencing it was a little different.”

The pandemic is roiling an area almost entirely reliant on Ellison, the world’s 12th-richest person and a lavish spender on luxury real estate. Over the years, the Oracle co-founder has amassed multiple Malibu homes, a Southern California golf course and a handful of historic mansions in Rhode Island, not to mention several superyachts. But his 2012 purchase of Lanai stands apart because it’s not just a private property or business, but home to thousands of people who have little say in many aspects of the island.

Ellison, 76, owns Lanai’s two hotels, a luxury wellness resort and is the main employer of almost all of the working residents. The 140-square-mile island, with only one school and no stoplights, is sustained by tourism to his swank properties. That means viral outbreaks both there and on the mainland risk longer-term economic pain for its inhabitants.

Representatives for Ellison at Oracle and Pulama Lanai, which oversees much of the island, didn’t respond to several emails and phone calls requesting comment. A spokesperson for the Four Seasons Lanai declined to comment.

Quick Response

The upside to having billionaire ownership is that the response to Lanai’s coronavirus outbreak has been uniform and well supplied. Ellison has donated testing supplies and invested in the hospital, while leaders at his company have directed the response in tandem with local government.

More than 4,000 tests have been conducted on the island — exceeding the number of residents — largely thanks to the kits donated by Ellison, said Maui Mayor Michael Victorino, who also oversees Lanai. He last week eased lockdown measures after new infections started to slow.

Still, residents are nervous, Shea said. While the Four Seasons is set to open again Friday to those who can produce a negative Covid test, new outbreaks are possible. If hotels close again, it’s unclear if Ellison will keep employees on the payroll. Unlike in most U.S. towns where frustrated residents can hold local officials accountable, there is little transparency about plans for the island, which is largely run by Pulama Lanai. (In Hawaiian, Pulama means to treasure or cherish.)

“The people who are laid off, they’re terminated and it’s harder for them to go to other jobs because there are no other jobs on the island,” said Alberta de Jetley, a longtime resident who founded Lanai Today, a monthly newspaper that she sold to Pulama Lanai in 2019.

The May cover of Lanai Today gives a sense of the loyalty some locals feel toward the billionaire. The headline “A Grateful Community” is laid on top of a photo of four residents holding up a homemade sign that reads “Thank you, Mr. Ellison!” At that point, nearly two months into the state lockdown, Ellison told the roughly 1,200 employees of his three companies there — Pulama Lanai, Sensei and Four Seasons Lanai — that he’d pay them through May. He ended up doing so through July.

Ellison has gained residents’ favor by investing in the island, said Gabe Johnson, a farmer who was recently elected as Lanai’s member of the Maui County Council. Prior owner David Murdock — who took control of the former pineapple plantation through his purchase of Castle & Cooke, once part of what is now Dole Food Co. — put little money into the island, Johnson said. Calls to Dole requesting comment from Murdock, who is on the board, weren’t returned.

“The town would be a little bit dilapidated or things would start running down,” Johnson said. “When Ellison bought, it was kind of a nice refreshing change.”

‘No Brainer’

Since purchasing Lanai, Ellison has remodeled the hotel and opened his wellness retreat alongside a hydroponic farming venture, Sensei Farms. He also owns the island’s main grocery store, Richard’s Market, as well as much of the housing stock. That means keeping Lanaians financially secure is in his best interest.

“I rent an apartment from the company, I used to work for the company, I used to shop from the company’s store,” said Johnson. While his farm is one of Ellison’s rare competitors, he appreciates that Sensei is providing employment outside of the tourism industry. For him and other residents, the pandemic has brought home Lanai’s need to diversify its economy.

“It’s kind of a no brainer,” said Butch Gima, a longtime resident and social worker on the island. “When they shut down the hotels, there was no work, no people coming in here and no people coming up to the city and patronizing the businesses.”

The problem with shifting the economy is that it requires the buy-in of Lanai’s billionaire owner. Gima said several years ago the island tried to create an economic charrette, or master plan, but it ultimately halted the process because Pulama Lanai didn’t want to participate. He is hopeful that residents can find remote work for companies like Google or Amazon, which wouldn’t necessarily require Ellison’s cooperation.

“If you’re going to have brick-and-mortar businesses, then yeah, Pulama will be involved because they own all 98% of the land,” Gima said. “But if you’re going to do web-based, internet-based types of businesses, then you don’t necessarily need brick-and-mortar establishments and you can work out of your home.”

For now, Lanai is tentatively getting employees back to work. Victorino, the mayor, said he’s grateful to Ellison for all he’s done, including paying full wages to the Four Seasons’s employees for months. Maui County has one of the country’s highest unemployment rates, but Lanai has largely been shielded from that pain.

“We welcome help from the outside,” Victorino said. “They’re there to make our working class better off for what we have to go through being so isolated in the middle of the Pacific Ocean.”

After the initial outbreak, Lanai has had no new coronavirus cases since Nov. 5. The island will be the test site of a new application called AlohaSafe that will alert people if someone they’ve been in contact with tested positive for Covid-19. If it works there, it will be launched state-wide, Victorino said.

The island was chosen as a pilot site, he said, after a request from an important entity: Pulama Lanai.