Kūka‘iau Ranch

On the Landscape of the Big Island Forever

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By Jan TenBruggencate

It was an innovate solution to a difficult problem.

David and Josephine DeLuz, owners of Hawai‘i Island's Kūka‘iau Ranch, used a flexible land and estate management tool called a conservation easement to ensure that their land would never be subdivided or used in a way that would compromise its conservation value.

Their choice—and one being used more and more across the state—preserves a culturally important landscape, safeguards native wildlife, protects watersheds and allows the landowners the certainty that their vision will be carried on for generations.

“We realized that if we didn't move to protect the ranch now, it could be divided up and sold off for development after we were gone. And then it wouldn't be a ranch any more. It would be a residential area,” said David DeLuz.

Large native ecosystems exist in the mauka portions of many island ranches, representing one of the greatest conservation opportunities in Hawai‘i.

In the case of the DeLuzes, the upper reaches of their 10,200-acre Kūka‘iau Ranch lie adjacent to the Mauna Kea Forest Reserve. Here, there are two dominant native tree species, koa and māmane. The Hawaiian hawk or ‘io and the yellow palila wing through the forest. And streams flow from elevations above 8,000 feet down to the ocean.

Custom Crafted
Working with The Nature Conservancy and the Hawai‘i Island Land Trust, the DeLuz family crafted a conservation easement unique to their ranch and their desires. The mauka 4,500 acres of the ranch are covered by the easement. About a quarter of that acreage will be preserved strictly for conservation, while the remainder will be available for limited forestry and sustainable agriculture.

The team that hammered out Kūka‘iau's conservation easement used the singular characteristics of this land and the requirements of its owners to shape the agreement. Such flexibility is a key feature of conservation easements, which convey development rights while the landowner retains title and the ability to use the land within limits the landowner sets.

“With a conservation easement, the landowner can in a sense codify their vision of the land forever. It has the power of law and the watchdog of a conservation organization behind it,” said John Henshaw, director of conservation programs for The Nature Conservancy of Hawai‘i. 

Most conservation easements held by land conservation organizations are donated by the landowner, for which he can receive a substantial tax deduction. In some cases, easements may be purchased by the conservation organization, utilizing funding from any of a range of federal, state or county programs, or grants of private money.

If the easement is sold at a bargain sale price, the landowner may also have some tax benefit, in addition to the direct income.

Multiple Benefits
An easement generally reduces the value of the property due to the removal of development entitlements and thus can reduce inheritance taxes.

At Ulupalakua Ranch on Maui, the Erdman family worked with the Maui Coastal Land Trust to donate an agricultural conservation easement on 11,030 acres of pasture and native dry forest. Protecting agricultural lands was the key benefit here, but that is just one of the many potential uses of conservation easements.

“We take easements for a variety of reasons,” said Dale Bonar, executive director of the Maui Coastal Land Trust. “Easements can protect agricultural lands, scenic views, watersheds, public access, native habitats, cultural features or educational values.”

Sometimes, a conservation organization will take over management of the land, as The Nature Conservancy does with Molokai Ranch lands it handles at Kamakou on Moloka‘i. In other cases, the landowner continues to use and maintain the land, with oversight by the conservation agency.

“There are a variety of things that a landowner will find attractive about a conservation easement,” said Greg Hendrickson, real property administrator for Hokukano Ranch and Kealakekua Heritage Ranch on Hawai‘i Island.

The key players at those ranches—John and Gussie Pace and one of their sons—are working to donate a conservation easement covering 9,000 of Kealakekua Heritage Ranch's 11,490 acres. It is generally prime native forest bird habitat, Hendrickson said, above the range of mosquitoes that carry the bird disease avian malaria.

The ranch has entitlements for 500 residential units. The elder Paces thought that was excessive and settled on the conservation easement process to protect their property from fragmentation, while allowing its continued use for traditional purposes.

“You try to design an easement that accomplishes the base level management without prescribing too much management,” Hendrickson said.

At Kūkai‘au, David and Josephine DeLuz wanted to have a productive working ranch but also protect important areas for their historic and ecological value.

“The family’s goal is to prove that working ranches can be profitable agricultural centers, while at the same time providing protection of watershed, species and cultural resources,” Josephine DeLuz said.

By using a conservation easement, the DeLuzes now have the opportunity to achieve that goal.

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