Hawaii: When a Billionaire Buys Your Hometown

big things seton bought a Hawaiian island recently. In his first interview since buying three months ago, Larry Ellison shows he's as ambitious as he is rich. The news meant that Peter had a new landlord, and at first things went relatively well. For one, he had a new spending client. Ellison's people asked Peter to make some furniture and hired his shop, Lanai Woodworkers, for one of his first projects on the island, building a Nobu, you know, the Japanese

restaurant known for its celebrity sightings. Here's Peter remembering one of the earlier projects he did for Ellison. Mr. Ellison was starting to spend more time here and the story was he didn't like rectangular square tables. He didn't like corners, and so they wanted this massive round table and they're like so many other jobs. We did it, We got it done. It was a nice table. Massively. The Nobu job was finished six months after Ellison bought the island.

Chris Andrews, one of Peter's employees, remembers meeting Ellison for the first time during its opening in late December of that year. We're down there for the soft opening. At one point I had to go to the rest of us, so I pushed my chair back and bumped into someone. All I apologize, is so sorry, And I turned around. Here's a scrubby looking guy. Couldn't he believe use their flannel shirt head shape? He said, Oh, I'm Ellison And I said, oh, Mr Ellison, Well we did these walls

were lynn I would workers. We did your hostess stand. He shakes my hand and says, we're going to do great work together. January one. We had a distinction of being the first company that he killed, the first company he kills, but not the last, and it would be a slow death. Ellison's management company, Palama Nai, which means to cherish Lenai, first came to Peter with an ultimatum, either he could sell his business to Polama or vacate

the building. When Mr Ellison bought the island, they came to me and said, listen, we owned this building, we want to use the building. You can work for us, or you can go do something else. For Peter, the choice was simple, keep doing what he'd been doing for years. He sold the business and worked for Ellison for another six years. Then not of nowhere again, Ellison's company decided

to shut down Lanai Woodworkers entirely. Masamoto called me into his office and, as a surprise to me, called me into his office and uh, well, me was closing a woodshop. Kurt Matsumoto is the president of Ellison's management company. After that, I asked her if we could buy any the equipment, and he told me no. He recommended I leave the island, and I was kind of shattered by that, kind of made up my mind. Well, I guess I'm not leaving. The problem for Peter is he might not have a

choice in the matter. Ellison also owns the apartment where he lives, and there's a stipulation in the billionaires residential leases that if you work for one of the landlords companies and are fired. That's grounds to terminate your lease. In other words, Ellison could kick him out of his apartment at any time. So you're holding your bronake. It easily say, well, listen you, you don't work for us anymore.

You have the vacate. And so it goes on an island owned by a man who's so rich that if he wanted to, he could afford to buy Lennai three hundred times over. Jobless claims coming in, I mean really jumping from the week before, pretty brutal. Three point to a million records six point six million Americans filed for unemployment lost week. Indian booking reminable, the worst impacted by

the pandemic. Well, now to the billionaire boom. According to Bloomberg's supriocht charters are up over three hundred and a billionaire was created every twenty six hours during this condetic Larry Ellison loves to go shopping for big things. You bought a Hawaiian island recently. No one not waiting in line for a COVID test with the public roads. It is time for a wealth tax and America welcome back

to the paycheck I'm Rebecca Greenfield. The growth and wealth inequality around the world in recent decades has been driven by explosive wealth creation at the very top. Before the pandemic, billionaire wealth was booming. The top twenty richest people in the world held as much wealth as half of humanity, that's almost four billion people. Then during the pandemic that gap got much wider. Here's a bile Aghmed, a strategist from ox MAM International. This pandemic, we're witnessing the biggest

increase in billionaire wealth since records began. In fact, billionaire wealth has increased more during the pandemic than it has in the fourteen years combined, and a billionaire was created every twenty six hours a year into the pandemic. It only took ten billionaires to get all the wealth held

by half of humanity. Wealth isn't inherently bad, and a lot of people argue that billionaires have benefited society by innovating, creating jaw new companies, and they were in part incentivized to do that by the prospect of getting very wealthy. Many of them also use their money to give back in ways that better the world, by, for example, funding

research that creates things like vaccines. But money is power, and increasingly one group of people is accumulating so much wealth that in some ways, it can bend the world to its whims at the expense of others. One such billionaire is Larry Ellison. According to Bloomberg's Billionaires Index, which tracks billionaire wealth, he's worth around ninety billion dollars depending on the day. That's nearly double what he had before the pandemic. Ellison made his money as the co founder

of Oracle, a software company. He's part of a new generation of scions, wealthier and more powerful due to a soaring stock market that has primarily benefited American technology giants. They have an unfathomable amount of wealth to most people, even probably themselves. Ellison may be best known for how he spends his money, mansions, yachts, a tennis tournament, and buying of the island of Lenai, the two Four Seasons resorts there, around a third of its housing stock, and

practically all the commercial properties. Plenty of wealthy people own private islands, but Lanai stands out. It's home to around three thousand people, many whose families have lived there for generations. Overnight, when he first bought it back in Most of those people got a new boss, or a new landlord, or both. Now they have a new neighbor. Like many office workers stuck in their homes during lockdowns, Ellison relocated to one

of his many properties on Lanai. With the billionaire's attention focused on the island now more than ever, residents are anxious. None of them wants to become the next Lanaii woodworkers. Sophia Alexander, a reporter on Bloomberg's Wealth Team, went to Hawaii to see how things are playing out. There's a reason people conjure images of Hawaii's sandy beaches, sunny blue skies, and rolling green mountains when they think of paradise. Lanai is no different. Approaching the island on the ferry from

Maui's Lahinah Harbor, It's hills look buttery soft. The Pacific water that surrounds it is a deep blue, so clear. In some parts you can see the ocean floor and a ring of clouds hovering around the islands. Mountain Peak is called Mount a Lay because it looks like the island is wearing a lay the Polynesian flower garland. It's idyllic so it's easy to see why someone would want to buy a Hawaiian island if they could. We know that you've made tons of headlines recently ying in island

in Hawaii, Lenna, buying tons of homes. How many homes do you own right now? Um, well, let's see homes that I live in? Or why do you buy the home if you don't live in? Well, for example, I bought a home in Newport, Rhode Island, which I'm converting into a nineteenth century European art museum. Larry Ellison didn't respond to my emails asking to talk to him for this story, and his management company didn't make any of

its executives available to me. We did find this one interview he did on CNBC back in two thousand twelve. Back then, he said he wanted to make Lenai a sustainable paradise and help local start small businesses. He also goes on and on about his plans for his own art museums and his desire as a kid to be a pilot, which is why he now has his own planes to fly. But Lenny isn't just a mansion or a jet. It's a community and one small decision from

Ellison can change everything. It's like a real life version of SIMS, the World Building video game. Now a decade has passed and Ellison and his company have changed a lot. On the Nai Lanai woodworkers closed, so did the family owned pokey shop and the car rental business and more recently the cafe down the street. Most day. They were given no explanation for their demise in and of itself.

When they buy this business or take over this business doesn't seem much but in totality that that is a concern from an economic standpoint, and just from the I think from the perception residents have of what they're doing on much control they have. Was it a metaphorm looking at is throwing a crab, you know, part of cold water and turning on the stole and you know, realize that they're being boiled to death. That's Bochema, a retired social worker who grew up on the island and is

one of the most vocal members of the community. We're in Dole Park, the quasi town square of Nay City, which got its name from James Dole, who bought the island in one years ago. Dole decided to turn the island into the world's largest pineapple plantation. So yeah, I mean the Pineapple dictated how life went, you know here in our community. And the old Pineapple, I mean they basically took care of everything. They ran the barge to and from Oahu. You kind of ran the clinic, they

ran the hospital. I mean, you know, they ran everything. So they had a lot of control over what happened in town. Butch grew up on the island during plantation days, when everything was regulated by the company. Whistles marched the start of our work day and whistles marked the a p m. Curfew. The control over seemingly every aspect of life and the dependence on the company for family's well being created what locals still referred to as a plantation mentality.

What's this in the plantation? Is this idea that if you work for the plantation, you don't speak out against them, and that holds true no matter what to this day. That's Solomon pele Halla Halla, a seventh generation Lenian who goes by Saul. He also grew up during the plantation days. My parents then, we're both the workers of the pineapple plantation. My mother was a pineapple picker and my father became a heavy equipment operator and a truck driver irrigating the

pineapple fields. First all, there was one instance in particular that crystallized the wealth gap between the Nays residents and Lenie owners, a divide that's only grown bigger With Ellison. I took a part time job. In the evening, I did bartending as our part time, you know, And on one day a group of people came in to have lunch, and they are unusual group of people because the women had Mike strolls on and I was serving their drinks.

So they were ordering martiniz for lunch. And then when they were getting ready to leave after their lunch, they were walking out with their martini glasses and as a bartender, I'd just said I better go and retrieve the glasses. So I started to walk out of the hotel and then the manager saw me, and then she stopped me and she says, where are you going? And said, I'm going to go and get the martini glasses from those people that are leaving, And then she's stopped and she says, no,

let them go. And I said, why they're taking our glasses and she says, these are the board of directors for the Doll company. Yeah, that helped me to realize that this plantation was supporting the people that we're having martini lunches. And so I asked her, I said, so they're leaving right now, Are they going to go in into the pineapple fields to thank my mother and my father for what they do to give them their flaunting wealth? And she says, I don't think so, And then I

was crushed at that moment. Doll closed its plantation after its parent company was bought by a billionaire named David Murdoch. Murdoch is what locals now call a poor billionaire. He was only worth a couple of billion dollars compared to Ellison's roughly nine billion dollar fortune. People told me they remember Murdoch routinely complaining about how much money he was losing from the island. Ultimately, when he could no longer afford to keep it running, he sold it to Ellison.

But Murdoch's impact on the island was enormous. He's the one who built the two hotels and oversaw the transition from pineapples to tourism. The change wasn't easy, and he tangled with many of Lenais residents during his reign, often getting into screaming matches with locals. But unlike Ellison, people here told me the island's previous owner was at least willing to talk to them face to face. For me, that is a relationship, and that is one that allows

us to interact whether we agree or disagree. I've had that relationship with with Murdoch because when he was wrong, when he had no idea about it, I wouldn't hesitate to him, and he would always tell me, you know, you're a thorn in my side, you know, And I took that as a compliment. Now with Ellison, it's a completely different story. Solve remembers approaching the president of Ellison's company to ask for a meeting with the new owner. I say, Kurt, I would like to request a meeting

with Ellison in person. Kurt's response to me, and I'll never forget this, He says, I don't mean to be disrespectful, but that is not Ellison's style. Those are the exact words they've been ingrained in me from that very moment. And my response to Kurt was, first of all, that is disrespectful, But beyond that, I still have an expectation that we need to sit down and meet, you know,

and so I make my requests. So I've been waiting now for ten years to have a conversation, just to get to meet this person who somehow this mystic and this mover and shaker in a community of which we don't get to see you or no, and my requests have never been acknowledged or responded to. I also to speak with Kurt Matsumoto, the president of Ellison's management company, but he didn't respond to my emails. A spokesperson for Poulama did suggest I talked to Diane Presa, who acts

as a liaison between the company and the community. She didn't seem to want to talk much about Ellison's plans, but she was the only person from Ellison's company who agreed to be interviewed. So I had to ask, do you feel like you have a broad sense of what the plans Polama has for the community? Are? You know?

Things change at Puloma all the time. So I hate to say something and then it doesn't happen, you know, I guess like long term plans, you know, um I would say no, while the uncertainty is scary for people like Saul and Butch, who have lived on l Nay for decades. There's more at stake for the younger generation that worries about its future here on the island. Take Michelle Fuji, a thirty eight year old high school math teacher who grew up here and is raising her two

kids here. She loves lenai An enthusiastically offered to drive me around to show me her favorite parts of the island. Like pretty much everyone else here, her speedometer rarely topped, and it seems like she waved at every passing car and person. Let's see if Auntie wants to ride because she's walking to the rain. Sorry, that's Auntie. You like when ride it is raining? You sure? Okay, you go girl with your exercise. Everyone seems to know everyone here.

People refer to their elders as aunties and uncles. I routinely saw people hugging. A stranger even invited me to his kid's birthday party on the beach. Ellison is not part of any of that, and it doesn't go unnoticed. I think a big difference between Murdoch and Allison is

is just the connection to the community. Like I and and I maybe it's like, you know how there's like the five love languages and what is your best like love language UM, And so maybe Murdoch was like words of affirmation or service, you know, where he would actually come out UM or quality time and spend time with the community members, like people knew him by like first name, and you know, whenever he would come home, like sure

there's still that plantation boss mentality and everybody bowed down and you know, praise you. But at the same time, it's like people knew who he was. When you've seen his face, you would recognize him and he would greet you. Ellison is a little bit different. I've never met him. Without any insight from Ellison, that leaves Michelle to fill in the blanks about how his company's plans will affect

her life. I don't think that I'm fully Like if I had to put my money on whether or not Poulama is solely in it for the best interest of our community, I would not put my whole fortune on it, you know what I mean. Since the pandemic started, more rich people seem to be moving to the island. Michelle

is worried about the community becoming more divided economically. One of my biggest fears is that the people of this community will sort of be the ones that would be caring for the elite rich that can't afford to actually live here one day, and that's our sole purpose. Like as an educator, you would think that we would want our students to graduate and aspire to be more than

just somebody's servant. Michelle and her fiance have three kids between the two of them and are excited about getting married, but she says it's getting impossible to find housing, especially after Ellison moved to the island and the pace of his construction projects have picked up. All those projects need people to build them, which means more construction workers living on the island taking up the already limited housing options.

There's no houses. Really, isn't any homes that we could affordably rent, you know, Like I think now, if we were to try and find the house that was being rented by some local family, we would be paying like two dollars a month, because that's what construction workers would pay, or that's what you know, the market would allow for. To alleviate the housing crunch, Ellison is building more homes

on the island. The plan initially had units for sale, but something changed and now they're all only for rent. At first, Michelle was against the project because of the change and the fact that the units will all be fully furnished, making it feel like they're for outsiders moving to the island temporarily. But with her wedding coming up,

she's desperate for options. That where my sway changed, you know, Like then it's like, okay, well, if we're thinking about the future as a married couple and we're not able to live together unless we you know, I don't want to say sell out because it's not really selling out because we're not really selling anything, but it definitely changed my perspective of things versus it just being like, you know, we gotta think about ways that we're going to merge

our family, and that right now would be a solution. Younger families like Michelle's have been moving off the island recently. Michelle said she worries that if she did leave and gave up her housing and her job, then there'd be no way for her or her kids to return because everything is becoming so expensive and there are so few employment opportunities outside of working for the billionaire around the world. As the rich get richer and decided to move into

your neighborhood, changing it to fit their tastes. People often throw around the word gentrification, but on the night it goes beyond that, because it ultimately comes down to the tastes of one person who increasingly dictates who and what is allowed on his island. And in this version of gentrification, you're not pushed further from the city center. You're pushed into the ocean, and who knows if you can come back.

When I first started reporting on this season of The Paycheck, an economist named Gabriel Zuckman told me something that's stuck with me. He said, if you think about it, extreme wealth inequality is inefficient. To someone like Larry Ellison, an extra billion dollars doesn't change his life that much, but that amount of money for the thousands of people on the island, it would drastically change their lives. When you own a hundred billion dollars, it's just useless. It's not

changing their lifestyle. It has no meaning. And whereas an extrat billion, you know that that could be I don't know, paid in taxes spent on education and healthcare, on infrastructure that that is valuable. Next week on the Paycheck. We had to a place where the government's decisions about how to manage the pandemic had unintended consequences for women. I mean, as public had professionals. We must do better. We have to educate people. We had to educate communities, We had

to educate po data. It will be a mainting if we can help them to work together with the physicians, for them to learn more and to be working together. Thanks for listening to The Paycheck. If you like our show, please head on over to Apple Podcasts or ever you listen to podcasts and rate a review and subscribe. This episode was hosted by me Rebecca Greenfield and reported by Sophie Alexander. It was edited by Shelley Banjo with help

from Francesca Levi, Janet Paskin Rocksheeta Soluja, and me. We also had editing help from Daniel Balby, Kristin B. Brown, Gildaa, Carly, Nicole Flato, Melissa McDonald, and Kai Schultz. This episode was produced by Gildaa, Carly and sound engineered by Matt kim Our. Original music is by Leo Sidron. Special thanks to Magnus Hendrickson, Mckinnonda Keeper, Margaret Sutherland, Stacy Wong, and Aisha Diello. Francesca Levy is Bloomberg's head of podcasts. See you next week.