Ulupono Initiative

Ulupono Initiative (Ulupono) is an impact investment firm focusing on sustaining Hawai‘i through large-scale for-profit and non-profit investments that produce more local food; increase clean, renewable energy; and reduce waste. The company strives to double local food production, decrease reliance on imported fossil fuel by 70 percent by the year 2030 and decrease waste by 30 to 40 percent.

Ulupono Initiative
TypePrivate
IndustryImpact Investment
Founded2009
FounderPierre Omidyar
Headquarters
Honolulu, Hawaii
,
United States
Number of locations
1
Area served
Hawaiʻi
Key people
Pierre Omidyar (Founder), Pam Omidyar (Founder), Mike Mohr (Board of Directors), Randy Ching (Board of Directors), Murray Clay (Managing Partner), Amy Hennessey, APR (Communications Director)
ServicesAdvocacy, Grantmaking, Private Equity
OwnerPierre Omidyar
Number of employees
10-15
ParentThe Omidyar Group
WebsiteUlupono.com

eBay founder Pierre Omidyar and his wife Pam established Ulupono in 2009 based on their conviction that every person has the power to make a difference. After each spent parts of their childhood in Hawai‘i, they returned to live there and saw an opportunity to make values-driven community investments and contributions that would sustain the land and stimulate the economy.[1] Pierre Omidyar has publicly committed to giving away the vast majority of their wealth away within his lifetime and in 2010 joined Bill Gates and Warren Buffett’s “giving pledge”.[2]

Ulupono Overview

Ulupono is a Hawai‘i-based impact investment organization that is rooted in the local wisdom that a healthy environment and a healthy economy are intertwined.

  • Investments include solar energy, biofuels, electric vehicle charging networks, expanded local agriculture and waste reduction projects. In addition, they’re working to re-establish homegrown dairy and grass-fed beef industries.
  • Policy work is helping to shape and influence state and county measures and amendments that they believe will make a meaningful impact in Hawai‘i.
  • The research Ulupono conducts to help inform this work is shared to help the community in its efforts, including a local food market demand study of O‘ahu shoppers to gauge consumer demand, studies about grass and water for grass-fed productivity and more.
  • Non-profit portfolio includes extensive work in creating and supporting school gardens, farm-to-school networks, agricultural incubators, as well as leadership development in these key areas.

Ulupono aims to play a catalytic role with its investments, typically focusing on several investments each year of $1 million to $3 million in key mission-focused projects. The company works closely with its investees to help them achieve their goals, seeking a governance role where appropriate. As of December 2017, Ulupono invested approximately $77,104,422 toward achieving its mission and goals. Of its funding allocations in their portfolio: 47.5% are dedicated to local food, 48.5% are dedicated to renewable energy, 3.0% are dedicated to waste reduction, and 1.0% is dedicated to water management.[3]

When Ulupono was founded in 2009, Kyle Datta[4] and Robin Campaniano[5] were brought on to co-lead Ulupono as its first leadership hires.

Portfolio

Because Ulupono is focused on creating impact for Hawaii, the company looks carefully at companies and organizations that will help achieve its goals in its sectors of interest. The company finds there is often crossover within sectors, but ultimately, it invests in organizations that are working to produce more locally grown food, more renewable energy and/or reduce waste.

Ulupono seeks to invest in and help grow local organizations involved in clean/renewable energy, diversified agriculture, and use waste as a resource that have high potential for creating large-scale social impact in an innovative and sustainable manner, and where its involvement will be catalytic in achieving that outcome.

Ulupono has invested in companies including Hawaii Dairy Farms[6] on Kauai, Honolulu Seawater Air Conditioning,[7] Sopogy, SolarCity, Blue Ocean Mariculture, Hawaii BioEnergy,[8] Phycal,[9] Kapalua Farms on Maui,[10] Oceanic Institute Research Feed Mill, Ibis Networks,[11] and Bioenergy Hawaii.[12] Of Ulupono's 57 investments since inception, 1 (Clearfuels) has brought more cash inflow than outflow (1.8%). Total investment inflow is $14M and outflow is $66M. Ulupono has also provided grant funding to Bikeshare Hawaii to start and expand operations.[13][14]

Policy

Ulupono believes transformation can be achieved at a policy level through the support of state and county measures and amendments. The company collaborates with likeminded organizations to advocate for policies that will make a meaningful impact in Hawaii.

Most notably, Ulupono was a strong advocate of a Hawaii state constitutional amendment to allow farmers, ranchers and owners of other agricultural endeavors to request special purpose revenue bonds (SPRB).[15] The measure passed with 50.2% of the vote in Hawaii's 2014 general election. Ulupono, the main funder of the "Local Food Coalition", contributed $500,000 of the $507,400 (98.5%) raised for the amendment's passage.[16]

Starting in 2020, Ulupono has shifted its focus from financial investments to policy/advocacy due to its lack of successful investments.

Controversies

Hawaii Dairy Farms

Ulupono was unsuccessful in starting Hawaii Dairy Farms, a 550 acre dairy farm with 699 to 2,000 cows in Mahaulepu, Kauai, six-tenths of a mile upslope from the ocean. The project was opposed by local community groups and the Grand Hyatt Kauai Resort and Spa. In 2015, Friends of Mahaulepu sued Hawaii Dairy Farms, alleging violation of the federal Clean Water Act by installing irrigation systems and wells without a stormwater construction permit. Hawaii Dairy Farms was ordered to pay more than half a million dollars in attorney fees and court costs and $125,000 to fund a supplemental environmental project for stream-bank restoration and endangered species protection at Makauwahi Cave Reserve. In June 2016, Hawaii Dairy Farms completed a draft environmental impact statement on the project and submitted it to the state Department of Health in January 2017. In March 2017, the Department of Health wouldn't approve the final Environmental Impact Statement and Hawaii Dairy Farms withdrew the document from consideration. Honolulu-based Ulupono received $875,000 in state tax credits under a 2008 law that created incentives for landowners to preserve prime farmland for agricultural use in perpetuity. Ulupono said in a written statement that it is disappointed that Hawaii Dairy Farms didn’t succeed but that the tax credit program provided an incentive to take on risk with the project it estimated would cost $17.5 million.[17][18]

Honolulu Seawater Air Conditioning

Ulupono is the majority owner of the Honolulu Seawater Air Conditioning project after having made an initial investment on August 5, 2013[19] and forcibly buying out most of the remaining shareholders. The proposed $250 million project was appropriated State of Hawaii government backed Special Purpose Revenue Bonds in 2005 of up to $48 million[20] with extensions in 2010[21] and 2015;[22] in 2007 of up to $20 million[23] with an extension in 2012;[24] and in 2009 of up to $77 million[25] with extensions in 2014[26] and 2019[27] (expiration in June 30, 2024) after consistently not completing the project in time. The Hawaii State Legislature did not renew the Special Purpose Revenue Bond allocation from 2005 in the 2020 legislative session. On December 19, 2020, Honolulu Seawater Air Conditioning announced it was abandoning its development efforts and would wind down its operations by the end of January 2021, citing "financial sustainability could not be assured".[28] "Two years ago officials told Pacific Business News they had finalized a deal with the state to cool seven state office buildings and the state Capitol and said they expected to break ground in late 2019, but that never happened".[29] Murray Clay, Ulupono’s president and a Honolulu Seawater board member, said the decision to call off the project was not easy. "Letting go of our dream is not easy," he said in a statement. "Despite all of the environmental benefits and the project’s ability to help move our state toward greater energy self-sufficiency, it became clear it would not have been prudent to pursue this further."[30] "Ulupono invested more than $6 million into the project".[31]

2014 Hawaii Constitutional Amendment 2

In 2014, Hawaii Constitutional Amendment 2, which "allows the State to issue special purpose revenue bonds to assist agricultural enterprises on any type of land, rather than only important agricultural lands"[32] passed with 50.2%, 0.2% more than required and making it the closest ballot initiative in Hawaii's history. Ulupono contributed $500,000 of the $507,400 (98.5%) raised for the amendment's passage.[33] The League of Women Voters noted the concern about Amendment 2's passage was, "Large, for-profit agribusiness will also be eligible for low cost, privately-funded loans. This will give them a competitive advantage over small farms".[34]

Honolulu Rail Project Public-Private Partnership

In March 2017, Ulupono released its Honolulu rail system public-private partnership study that argued the City and County of Honolulu project should be restructured to a public-private partnership. Central to its findings, the P3 analysis concluded that the Honolulu Rail Transit Project remains dependent on public funding to close the $2 billion funding gap. Delays in identifying the funding source could further delay the project, potentially costing the taxpayers of Hawaii close to $114 million per year. The Honolulu Authority for Rapid Transportation, which was trying to get a handle on the $10 billion Honolulu proposed rail system, hired Ernst and Young Infrastructure Advisors to study whether P3 was a viable option.

“Ronald Tutor, CEO of Los Angeles-based Tutor Perini Corp. disclosed in a July 29 call with investors that his construction company is part of a team that’s competing against one other joint venture for rail’s P3 award. As part of the deal, the team that’s selected would build rail’s remaining four miles and eight stations into downtown Honolulu. HART has estimated that construction work to cost around $1.4 billion. However, during the call Tutor said his company’s bid was ‘over $2 billion”.[35]

The City and County of Honolulu announced on September 25, 2020 that it is pulling out of the effort to land a private-sector partner to complete construction and operate the 20-mile system during its first 30 years. Honolulu Authority for Rapid Transportation said they’re still trying to find a way to move forward on a process that has already taken two years.[36][37][38] Subsequently, the City and County of Honolulu announced on November 20, 2020 that it is canceling its public-private partnership efforts after two unsuccessful years. "Precisely what caused the P3 pursuit’s failure hasn’t been disclosed, although one of the companies competing for the contract shared in an earnings call this summer that its proposal was hundreds of millions of dollars more than what HART and the city had budgeted for the remaining construction. At the HART board’s meeting earlier Friday (November 20, 2020), Robbins said that HART had spent at least $10 million on outside consultant work for the now aborted P3 pursuit".[39]

Bikeshare Hawaii

Ulupono helped found, expand, and is the Chair of the Board of Directors for Bikeshare Hawaii.[40] According to the City and County of Honolulu's Auditor's Office, "Honolulu’s 3-1/2-year-old bikeshare program known as Biki has not benefited the city and lacks accountability and transparency. Altogether, the audit said that under its agreement with Bikeshare Hawaii, the city lost out on an estimated $460,728 in revenue in 2019 due to the displacement of metered stalls and permit fee exemptions. The city did not share in the nearly $1.4 million in sponsorship revenue between fiscal years 2017 and 2020. In addition, Biki does not report sponsorship amounts to DTS as required by contract".[41]

Human Rights Policy

Ulupono, as well as all of The Omidyar Group entities do not invest in, patronize, or support any organization, company, or product that is known to have slavery or human trafficking in its supply chain or anywhere else in its operations. If they learn of such labor practices across any of its organizations or investments, including subcontractors, the company takes immediate action to help ensure the situation is corrected. If this is not possible, Ulupono terminates its involvement. Ulupono requires those it works with to make themselves thoroughly familiar with this policy and to agree to upholding these practices.[42]

References
  1. Our Team, http://ulupono.com/our-team
  2. York, Carnegie Corporation of New. "Pierre Omidyar". Carnegie Corporation of New York. Retrieved 2020-11-22.
  3. Our Impact, Ulupono Initiative, https://ulupono.com/our-impact
  4. www.bizjournals.com https://www.bizjournals.com/pacific/news/2018/11/14/general-partner-datta-retires-from-ulupono.html. Retrieved 2020-12-06. Missing or empty |title= (help)
  5. "Talk Story with Robin Campaniano". Hawaii Business Magazine. 2010-04-10. Retrieved 2020-12-06.
  6. Hawaii Dairy Farms scuttles plans, citing Hawaii's regulatory environment, https://www.bizjournals.com/pacific/news/2019/02/01/hawaii-dairy-farms-scuttles-plans-citing-hawaiis.html
  7. Financial crisis, falling oil price contributed to delay of long-planned seawater A/C project, http://www.honoluluswac.com/_assets/_pdfs/20181023%20Financial%20crisis%20falling%20oil%20price%20contributed%20to%20delay%20of%20lon.pdf
  8. Hawai‘i BioEnergy, LLC, https://www.hawaiibioenergy.com/
  9. Phycal, http://www.phycal.com/
  10. Omidyar-backed sustainable-ag group takes over Maui's Kapalua Farms, http://the.honoluluadvertiser.com/article/2010/Jan/30/br/hawaii100130011.html
  11. WattIQ (Formerly Ibis Networks), https://www.linkedin.com/company/wattiq/
  12. BioEnergy Hawaii partners with Ulupono Initiative for energy conversion system, https://www.bioenergyhawaii.com/press-releases
  13. "About us". Biki. Retrieved 2020-12-06.
  14. "Bikeshare Hawaii - Portfolio - Ulupono Initiative". 54.235.66.117. Retrieved 2020-12-06.
  15. "Farmers groups offer support for Amendment 2". West Hawaii Today. Retrieved 2016-03-15.
  16. "2014 Election Summary Ballot Issue Committees" (PDF).
  17. No dairy farm, https://www.thegardenisland.com/2019/02/01/hawaii-news/no-dairy-farm/
  18. Hawaii's Taxpayers Take Loss on Failed Kauai Dairy Plan, https://www.dairyherd.com/article/hawaiis-taxpayers-take-loss-failed-kauai-dairy-plan
  19. "$1M local investment in Honolulu Seawater Air Conditioning". www.hawaiinewsnow.com. Retrieved 2020-12-21.
  20. "HB1238 CD1". www.capitol.hawaii.gov. Retrieved 2020-12-21.
  21. "SB2544 HD1.DOC". www.capitol.hawaii.gov. Retrieved 2020-12-21.
  22. "Hawaii State Legislature". www.capitol.hawaii.gov. Retrieved 2020-12-21.
  23. "HB870 SD1". www.capitol.hawaii.gov. Retrieved 2020-12-21.
  24. "Hawaii State Legislature". www.capitol.hawaii.gov. Retrieved 2020-12-21.
  25. "Hawaii State Legislature". www.capitol.hawaii.gov. Retrieved 2020-12-21.
  26. "Hawaii State Legislature". www.capitol.hawaii.gov. Retrieved 2020-12-21.
  27. "Hawaii State Legislature". www.capitol.hawaii.gov. Retrieved 2020-12-21.
  28. "Honolulu Seawater Air Conditioning to end development after 15 years". www.bizjournals.com. Retrieved 2020-12-21.
  29. "Honolulu Seawater Air Conditioning to end development after 15 years". www.bizjournals.com. Retrieved 2020-12-21.
  30. [email protected], By Andrew Gomes; Today; am, Updated 7:35 (2020-12-28). "Plans for seawater air conditioning in Honolulu dropped". Honolulu Star-Advertiser. Retrieved 2020-12-28.
  31. "Honolulu Seawater Air Conditioning to end development after 15 years". www.bizjournals.com. Retrieved 2020-12-21.
  32. "Hawaii Bonds for Agricultural Enterprises, Amendment 2 (2014)". Ballotpedia. Retrieved 2020-12-21.
  33. "2014 Election Summary Ballot Issue Committees" (PDF).
  34. "General Election 2014 Pros and Cons" (PDF).
  35. "Honolulu Rail P3 Bidder Wants More Than $2 Billion For The Final Stretch". Honolulu Civil Beat. 2020-09-18. Retrieved 2020-09-28.
  36. Public-Private Partnerships: Study Examines New Options for Rail, http://ulupono.com/news_posts/public-private-partnerships-study-examines-new-options-for-rail
  37. Rail Leaders Look To Curb Runaway Costs With New Partners, https://www.civilbeat.org/2018/05/rail-leaders-look-to-curb-runaway-costs-with-new-partners/
  38. Honolulu Pulls Out Of Public-Private Partnership Plan For Rail, https://www.civilbeat.org/2020/09/honolulu-pulls-out-of-public-private-partnership-plan-for-rail/
  39. ‘How Do We Go Forward?’ Honolulu Rail Leaders Kill P3, Confront Unknown Costs, https://www.civilbeat.org/2020/11/how-do-we-go-forward-honolulu-rail-leaders-kill-p3-confront-unknown-costs/
  40. "About us". Biki. Retrieved 2021-01-31.
  41. [email protected], By Nina Wu; Today; am, Updated 11:39 (2020-12-05). "Biki bikes costing Honolulu an estimated $460,728 in lost revenue, audit finds". Honolulu Star-Advertiser. Retrieved 2020-12-06.
  42. "About Us - Ulupono Initiative". 54.235.66.117. Retrieved 2020-12-06.
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