The island's best-known property closes its doors after locals say no to major development

In March, Molokai Properties Ltd., the owner of the island's two largest and most popular hotels, shuttered them following fierce local opposition to a real estate development that the company wanted to build along the southwestern coast.

The closure of the 65,000-acre Molokai Ranch, including the 22-room Molokai Lodge and the 40 furnished seaside tents at the Beach Village at Molokai Ranch, is the latest in a series of starts and stops for Molokai tourism, which began in 1977 with the opening of the 198-room Kaluakoi Resort and condo complex on the West End. Virtually abandoned since the early 1980s, the resort was purchased by Molokai Properties, a subsidiary of Hong Kong–based Guoco Group Ltd., in 2001. At the time, local officials and many residents hoped that the company, which had opened the Beach Village in 1996 and the Lodge in 1999, would resuscitate Kaluakoi, attracting tourists and adding jobs. But apart from a $500,000 golf course renovation, Molokai Properties left the resort an untouched eyesore. In 2006, the company announced that it would renovate the hotel as part of a master development plan that included the sale of 200 homesites (at $600,000 each) along La'au Point—the picturesque southwestern tip, accessible only by boat or a strenuous hike. Local reaction was negative, forceful, and immediate. The most visible display of residents' opposition to the plan was the hand-painted signs reading SAVE LA'AU that were tacked to trees and lanais all along the hilly ribbon of road that traverses the 38-mile-long island.

Locals say that the reasons for their opposition to the La'au Point project were numerous: the diversion of water resources needed for agriculture; the effect that the development would have on Penguin Banks, the shallow, 40-mile fish hatchery just off La'au Point (which is not only important to fishermen but hosts the highest concentration of endangered monk seals in the state); and the further erosion of the fishing and hunting that are integral to the lifestyle of many on Molokai.

Native Hawaiians throughout the state voice similar complaints over how an increase in expensive vacation home construction is driving up real estate prices, taxes, insurance, and the overall cost of living. While Molokai remains a largely undeveloped isle, on beachfront homesites in west Molokai there's no shortage of backhoes, clearing the way for multi-acre estates complete with gates, cameras, security stations, and, in the case of software developer John McAfee, an Asian--inspired $6.3 million manse with an entrance pagoda and a pair of 15-foot Chinese metal horse sculptures. Last year, Maui's riot police were brought to the island to quell locals when they learned that McAfee was attempting to sell 510 acres of Molokai land on eBay.

Among the supporters of the La'au Project, who saw it as a boon to the island's depressed economy and high unemployment, was Governor Linda Lingle, a former Molokai resident. The Ranch was also the island's largest employer: 120 jobs were lost when it closed (doubling Molokai's unemployment rate to 12 percent)—including those at its cattle ranch, movie theater, gas station, and general store.