When Don Williams purchased the Ma`alaea property in August 1994, the seller was a branch of the Church of Scientology, which had had an ownership interest in at least part of the land dating back to the early 1980s.
In the late 1970s, two of the three separate tax map parcels that now make up the area were purchased for $700,000 by Ma`alaea Landing, Inc., which planned to develop a condominium building on the land. Architect Ormond Kelley drew up plans for the building, which was dramatically different from the rather architecturally nondescript structures that line the Ma`alaea coast. In the words of the Maui County Planning Department, the architectural style for the development represented “a significant departure from the contemporary character of proposed and newly constructed adjacent buildings… However, considering the building’s strategic location, it is felt that the building’s romanticized pseudo-victorian character is a softer, more harmonious statement in sympathy with the existing character of buildings within the Ma`alaea Small Boat Harbor.”
Ma`alaea Landing, Inc., appears to have run into financial trouble. In 1981, title to the land was transferred to Pioneer Federal, which held the mortgage. According to the conveyance tax stamps, Pioneer Federal paid $325,000 for the land.
In November 1983, three individuals, all giving addresses in California, purchased the property from Pioneer Federal for $350,000, of which $262,500 was financed by Pioneer Federal on a three-year balloon note. The three individuals are Patricia L. Glaser (identified as the wife of Samuel H. Mudie); James S. Schreier (unmarried), and Marc M. Seltzer (unmarried). This transaction appears to represent the earliest involvement of the Church of Scientology, or its members, in the ownership record for the Ma`alaea property.
In February 1984, Glaser, Schreier, and Seltzer conveyed the property to Oceanfront Associates, which also assumed the mortgage held by Pioneer Federal. Oceanfront Associates, according to documents at the Department of Commerce and Consumer Affairs, is a limited partnership formed in 1984 to “develop … resort condominium projects” on the island of Maui. The two general partners in this firm were identified as Gray Productions, a Hawai`i corporation whose nature of business is described as real estate development in its filings with the DCCA; and COFE, Inc. The DCCA filing of COFE identified it as a California corporation whose president, vice president, secretary, and chief financial officer were all Samuel H. Mudie (Glaser’s husband). Identified as a limited partner was an Oklahoma corporation, FSO Oklahoma Investments Corp. Signing the partnership papers for FSO OI were David Cusworth and Ellen Reynolds, identifying themselves as “directors and attorneys in fact” for the corporation.
Not only did Oceanfront Associates assume the Pioneer Federal mortgage, it executed another mortgage for $775,000 in favor of the Church of Scientology, Flag Service Organization, Inc., whose state of incorporation was said in 1984 to be Florida. In 1987, the Pioneer Federal mortgage was itself assigned to the Church of Scientology, Flag Service Organization.
Two years later, Oceanfront Associates assigned its title to FSO Oklahoma Investments Corp., the limited partner in the firm.
The Ma`alaea parcel owned by Williams originally contained two other tax map parcels in addition to the two mentioned above. After a long quiet title case, ownership of both ended up in 1992 in the hands of FSO Oklahoma Investments Corp. These two parcels were later consolidated, so that now Williams’ land consists of three separate tax parcels.
Documents filed in September 1994, when Williams executed his lease with the state of Hawai`i, show that the Church of Scientology, Flag Service Organization, Inc., released the two mortgages it held on the property in October 1993.
On August 4, 1994, Williams paid $1.35 million, for which he received a warranty deed from FSO Oklahoma Investments covering the Ma`alaea land. Four weeks later, on September 1, the state executed the 30-year lease with Williams.
Williams was asked if he had an option to purchase the land from the Scientologists at the time he was negotiating with the state to lease the property. “No comment,” was his reply.
What is FSO?
Although legally incorporated in Oklahoma, the Flag Service Organization (FSO) is an arm of the Church of Scientology. Its business address, in Los Angeles, is in the same building as other Scientology organizations.
The Flag Service Organization is described in Scientology publications as the highest level of Scientology. According to a description of the Scientologists’ ecclesiastical structure that Scientologists have placed on the World Wide Web, the Flag Service Organization occupies more than 20 buildings, has more than 1,000 people on its staff, and is the largest Scientology “church” in the world.
Volume 7, Number 5 November 1996
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