The reins of the Big Island’s fourth-largest private landowner quietly changed hands last week.
The new president of W.H. Shipman Ltd. is Margaret “Peggy” Farias, previously the chief financial officer and treasurer of the Keaau-based company. She is the company’s seventh chief executive.
The 41-year-old Farias, the great-great-granddaughter of company founders William Herbert “Willie” Shipman and Mary Elizabeth Kahiwaaialii Johnson Shipman, succeeds her cousin, William “Bill” Walter, who retired after 13 years at the helm of the 136-year-old family-owned company that holds almost 17,000 acres of commercial, residential and agricultural property in Puna.
The mother of a 16-year-old daughter and 12-year-old son, Farias graduated from Waiakea High School and holds a bachelor’s degree in chemistry and biology from Harvard University and a master’s degree in conservation biology from the University of Hawaii at Hilo.
Walter, a great-grandson of William and Mary Shipman and Hilo High graduate who remains the company’s board chair, last week moved to Columbia, S.C., where one of his daughters lives. He first approached Farias in 2012 about the possibility of succeeding him. She joined the company in 2014 as assistant treasurer, where she learned the ins-and-outs of the business from her father, Tom English, who has since retired as Shipman’s CFO and treasurer.
Walter, who turned 70 in June, returned from the mainland after almost four decades to lead the company in 2005. He was an information technology consultant after a career as a corporate executive for Peterbilt Motors Co. and Mitsubishi’s truck division. Walter’s appointment as president returned the company’s top spot to a family member for the first time in 11 years.
Bob Cooper became the company CEO after the 1994 retirement of Walter’s maternal uncle, Roy Shipman Blackshear, the company’s third president. Blackshear in 1976 succeeded Willie Shipman’s son, Herbert Cornelius Shipman, who assumed the helm upon his father’s death in 1943. Cooper was succeeded by Bob Saunders, another chief executive without Shipman family ties.
“It’s a very difficult thing for someone who is not in the family to run a company that’s a family company,” Walter said of Cooper and Saunders. “I think they did a yeoman’s job, but I think at the end of that, the family said let’s see if we can do this ourselves, again, and I came back to do that.”
Walter, a former U.S. Navy submarine supply officer who earned his bachelor’s degree at Wheaton College in Illinois and M.B.A. at the University of Washington, said retirement at 70 was his plan all along.
“In any business, but especially in a family business, succession planning is really important,” said Walter, who added Farias is a “really good fit” to oversee the company — which owns, among other holdings, Shipman Business Park, Keaau Shopping Center, and the lion’s share of agricultural land around Keaau.
“Her background is in science. But a lot of the thought process that you go through is actually similar, I think,” he said.
Farias said Walter was “very conscientious in setting the company up to succeed once he retired.”
“We have a lot of exciting projects coming up, a lot of good projects, and I’m looking forward to the next 20 to 25 years … just to see what we build,” Farias said.
In the works is a master plan for Keaau village that could add 940 residential units in two phases over the course of 10 to 15 years, commercial development on 15 acres and a wastewater treatment plant. The project’s draft environmental assessment describes the project as a “walkable, transit-friendly regional town center concept” with “nearly all the project area … within a 10-minute walk of existing civic areas and the Keaau Elementary, Middle, and/or High School.”
“One of the problems you have in the schools here, so few kids are able to walk to school. A lot of them are bused in,” Walter said. “That creates a hardship on a lot of the families. I go to a lot of school meetings, and that’s what you hear over and over again, how hard it is on the families. We want to provide homes for those people.”
Walter described the current iteration of the plan as an extension of a master plan started in 2005-06.
“(Kamehameha Schools Hawaii) was up the road, which is important,” he said. “… Keaau schools had established here. But there was a lot of empty space in the village, a lot of cleanup yet to be done. There were houses along Keaau-Pahoa road that were just falling down and really a mess. The first issue was cleaning that up, then starting to build. And people found it surprising that we were building buildings. But we started to do that.
“Reflecting on where we are today, it’s really gratifying to me that you have HMSA, you have Liliuokalani Trust, you have (Kamehameha Schools) and their office groups. All of those groups you would have expected, generally, to be in Hilo. And they were all very anxious to get out here to Keaau and into Keaau village. This is where they wanted to be. You look at that as a transformation. These are organizations that are among the best in the state of Hawaii, and when they wanted to expand here on this side of the island, Keaau is where they chose to come. That’s really gratifying to the company.”
The Shipmans’ ties to Keaau go back 137 years.
Willie Shipman was born in 1854 in Lahaina, Maui, to Christian missionaries William Cornelius Shipman and Jane Stobie Shipman. Shipman’s father died of typhus in 1861, and in 1868, Shipman’s mother married businessman William H. Reed, for whom Reed’s Bay and Reed’s Island in Hilo are named. Reed, who had no children of his own, sent the young Shipman to be educated at Punahou School on Oahu and Knox College in Illinois.
When Reed died in 1880, Willie Shipman was sole heir to his estate. A year later, Shipman and two partners, Captain J.E. Eldarts and Samuel M. Damon, bought for $20,000 the entire ahupaa of Keaau, about 70,000 acres, from the King Lunalilo estate. Shipman later bought the partners out.
The company has been a major player in agribusiness, long before the word was coined in the 1950s, and in the beginning leased much of its land to sugar, coffee and tropical fruit growers. In 1899, Shipman and partners including Damon, B.F. Dillingham, Lorrin A. Thurston and Alfred W. Carter established Olaa Sugar Co., which later became Puna Sugar Co. A mill was erected in 1900 in Olaa, which operated until 1982. In addition, Willie Shipman was a rancher.
Farias said agriculture remains a major component of W.H. Shipman Ltd.
“I think it’s the quiet employment driver in Keaau right now,” she said. “We don’t do active agriculture ourselves. Our role in agriculture is as a landlord. But we have over a hundred different farming operations that are our tenants, employing, at last estimate, between 900 to over 1,000 people in Keaau. … It’s more than the plantation ever employed; that’s my understanding. And we want that to continue to be the case. … We’re working with displaced farmers from lower Puna, trying to see if we can accommodate their needs — if we can clear some of the lands that are more heavily infested with albizia.”
Shipman ag lands near Keaau became the center of controversy during a months-long lava crisis in 2014, when lava from Kilauea volcano came close to crossing Highway 130 in Pahoa. Walter feels he and the company were unfairly scapegoated by those who want an emergency access road cut through Shipman property. Walter’s position is that, in addition to taking acreage away from tenant farmers, such a road would open up the leasehold lands to agricultural theft and aphid-borne diseases such as banana bunchy-top virus. He added that Shipman offered land adjacent to 130 to build frontage roads.
“You hear people, particularly the politicians, say over and over again there’s only one emergency road out of lower Puna. It’s completely inaccurate. There are three paved roads out of lower Puna,” Walter said, noting that the portion of Railroad Avenue bulldozed near Hawaiian Beaches allowed those from lower Puna alternative access to Hawaiian Paradise Park and Ainaloa subdivision, where there are additional paved roads leading to Keaau.
“Why would you say there is one, when there are three paved roads out of lower Puna? You’re inciting panic when there’s no need for it.”
Walter said if conditions warrant, the issue could always be revisited in the future, but Shipman can’t be expected to shoulder the burden alone.
“If the community, staring in Pahoa and ending up in Hilo, everyone, said we’re all willing to contribute to have this road connecting them, we’re not going to stand in the way. We’re not going to be the one that stops it,” he said. “We’ll sit down with the whole community and say let’s work this out in a way that minimizes the damages to the farms and accomplishes this purpose. … We’ve offered solutions. The situation’s not as dire as it’s described.”
Walter said Shipman’s commitment to Puna “is validated by the fact that we stepped forward and said, ‘Here’s the land for a bypass’” of Keaau village on Highway 130 adjacent to Keaau High School.
Farias said she’s grateful for the opportunity to honor “a very special legacy.”
“I think one of the things that we as a company, that we as a family, recognize is that we don’t exist without the Keaau community,” she said. “And what’s good for the community is good for us. And we like to think that what’s good for us is good for the community. It’s in many ways a symbiotic relationship.
“The board asked me, ‘If you’re elected president, what are you going to do?’ And it’s a very simple answer. My vision is to continue helping to build a community that my children and my grandchildren can be proud to be a part of and will be proud to be a part of.”
Email John Burnett at jburnett@hawaiitribune-herald.com.
