Social Capitalism and Community Development at Kulaniapia Farms

Almost a year ago, we were faced with a tough decision about what to do when our neighboring farm went into foreclosure. It is always hard to see communities disrupted by financial challenges, and we decided to do our best to turn this hardship into an opportunity. The Inn has been operating for 20 years, and the last thing we wanted was an unpredictable new neighbor, who may not share our goals for community development and sharing our experience with the world.

To that end, we teamed up with the original land owners, the foreclosing lender, and a team of new partners to try and facilitate a graceful transition, and develop an innovative new business model that would create a more sustainable balance between landowners and those who create value on that land. We wanted to design a lifestyle that we could build a business model around, and are excited to share a bit more about how this experiment has gone, and why we are excited for the next year.

Here are some of the goals we established over a year ago:

  1. We wanted to establish a semi-permanent community where individuals may come and go, but a core team maintained a vision we could inspire others to contribute towards.

  2. We wanted to create opportunities for partners who could not afford to buy such a property, but were uniquely qualified to contribute as community members and entrepreneurs.

  3. We wanted to establish a platform where we could all teach and learn together, for its own sake, as we believe these concepts are inherently intertwined and are fundamental to our growth as individuals and a community.

  4. We wanted to get closer to our food, and find a way to share the experience of sustainable agriculture and livestock production with our guests, first as a farm, but someday as a restaurant.

  5. We wanted to create more unique accommodation options at Kulaniapia, specifically designed for our local, younger and more adventure minded travelers in a way that adds to the larger Kulaniapia community and experience.

The business model we developed can best be described as a form of social capitalism. We appreciate that financial security is important for any community, but we strive to create that in a way that places a higher priority on the socially minded lifestyles we enable, and the experience we create for our guests. It depends on the whole partnership working together, internalizing our shared vision, and each member doing their best to take care of each other, and advance our shared goals.

So, how does it work? That’s a much longer post, but here are a few of the key concepts:

  1. The land is owned by a holding company that commits to leasing the land back to an operating entity, at a price that is determined by the amount of capital contributed to the holding company. In our case, that rate is 7% per year, ensuring that the landowners receive a return comparable to a passive investment in a diversified portfolio.

  2. Families have a single vote on key decisions, but accumulate Community Credits as a family unit. Our partnership has family units that consist of individuals, couples, and families with children, all contributing in unique ways and earning differing shares of the profits.

  3. The operating entity distributes profits based on Community Credits, which depend on two factors:

    • The amount of time contributed by each partner and their family unit.

    • The amount of operational seed money required to get things up and running, beyond the land and building improvements.

  4. Community Credits accumulate and depreciate to keep incentives aligned.

    • Individuals can typically accumulate Community Credits for two years, ensuring that someone who joins later has the same opportunity as someone who joins earlier, if they become a core member of the community.

    • Operational seed money receives a smaller portion of the profits over time, ensuring that those who provide it are actively engaged in developing the business.

  5. Individuals can use community resources to develop side business, so long as they share some of that revenue with the community.

What do we have planned for the next year? The next year for us is about expanding on what is working well and investing more in the medium to long term development of our community and capabilities. This includes expanding our farming operations, adding additional luxury camping options, and most importantly, developing a more formal master / apprentice program to attract great leaders who value mentorship for its own sake, and creating opportunities for people who crave such leadership, while teaching what they can as well.

We are specifically looking to recruit the following types masters and apprentices:

  • Construction: Join our master builder and help us build everything from housing to agricultural buildings. Learn from the best, and apply those skills here and to your future projects.

  • Farming: Do you farm primarily for the love of the land, and enjoy sharing that with others? We are seeking both master and apprentice farmers to help us expand our operations. We are particularly interested in aquaponics. 

  • Culinary: Have you cut your teeth opening a restaurant, or maybe a food truck, and developed a passion for creating unique food experiences with local ingredients? We're missing out on a huge opportunity, and have plans for a restaurant stewing.

  • Hospitality: Have you managed a unique, experience focused, higher end hospitality product? We are seeking a master that has experience at 4-5 star properties as a GM, with experience overseeing sales, marketing, front office, housekeeping, F&B and activities. Also seeking apprentices to help with all parts of our growing business.

  • Art and Culture: Do you see and create beauty all around you, for it's own sake? Do you have a deep connection with Hawaii that you enjoy sharing with the world? If you are passionate about creating, teaching and sharing, we'd love to meet you. 

Masters typically live on property and help direct our core business, and are often on a partner track. Apprentices usually engage in work trades for their housing and instruction.

Whether you think you may be interested in contributing (or developing into) a master, or starting as an apprentice, if you'd like to learn more, fill out the form below, and we will get in touch if we see an opportunity.

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Christophe Bisciglia