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Feb 14, 2020

Executive analyzes trust's top priorities

By   – Real Estate Editor, Pacific Business News

Dawn Harflinger is spending 2020 preparing to take over the top post at Liliuokalani Trust, the 111-year-old trust created by Hawaii’s last queen to care for orphan and destitute children in Hawaii, especially Native Hawaiians.

Harflinger, who was promoted to executive vice president and chief operating officer last month after serving as chief financial officer since 2017, will succeed Robert Ozaki as president and CEO in February 2021 when he steps down to join the trust’s board of trustees.

Harflinger, who joined the trust in 2005, is taking over at a time of repositioning for the trust, which Queen Liliuokalani created through a deed in 1911 to leave her estate of more than 6,000 acres of land in trust.

Today, the trust is worth between $800 million and $900 million.

Last year the trust sold the ground beneath two Waikiki hotels for a total of $273 million, which Harflinger said was invested to help fund the trust’s programs for children and young adults.

The trust has also purchased land, spending a total of more than $26 million over the past five years on a mixed-use building on Queen Emma Street near Downtown Honolulu that will reopen as a Youth Services Center; a half-acre parcel next to the Honolulu Police Department that will become a five-story “innovation center” for youth; 2.25 acres at Leihano in Kapolei; a commercial property in Wahiawa, more than an acre in Kaunakakai on Molokai, two properties in Pukalani and Lahaina on Maui and 6.7 acres near Keeau elementary and high schools on Hawaii Island.

The trust is also working on a plan to develop 67 of its 700 acres in Kona into a mixed-use community with 300 homes, 470,000 square feet of retail and commercial space and 50,000 square feet of community use.

“We’re repositioning the assets to be in the communities where they need to be, closer in, where kids can get there,” said Harflinger, who is the mother of four children, two teenagers and two young adults. “We want to build these centers that are just filled with kids, because part of transformational change is getting kids in the door, you have to provide them a safe space for them to come to you.”

How are you preparing to take over as CEO?

I think it’s really important to take a deep dive into the organization to see where I can add value. There are three priorities for us. One is the repositioning of the properties. It’s a repositioning of the programmatic assets as key investments into the kids, because we need to be at a place that No. 1, they can get to and No. 2 they want to be in. Once we get them in the doors, we are certain that we can start to transform lives. Priority No. 2 is to continue the growth in the endowment area and you know that’s primarily in capital. And then the third priority is to have the organization ready to support the growth in the programs and also in the endowment side. It’s focusing on those three priorities and taking a deep dive into the organization.

What was the thought behind selling the leased fees in Waikiki?

I think it makes sense to diversify the real estate somewhat. We’re still one of the largest landowners in Hawaii. We remain heavily allocated in Hawaii real estate, we are still over 50%, maybe 60% in Hawaii real estate. If you look at the valuations, on a relative basis, we’re way overweight on real estate. The opportunity we saw was to take some profits off the table, and to rebalance that into the investment fund. It increases liquidity, it takes down that risk for us a little bit and it’s able to fund the programs. We’re not spending it down.

Are there any lessons you’ve learned from your business career?

One of the important lessons is to always be learning lessons. I’m a passionate learner. That comes in many forms, whether that’s reading or whether it’s failing, it’s really about having a growth mindset. We were just at Stanford, and we met with [psychology professor] Carol Dweck [author of the book “Mindset: The New Psychology of Success”]. She asked very pointed and good questions about growth mindset and how we develop that programmatically, and the awareness around it. We spent a lot of time talking about how it is almost more important to ensure that the growth mindset prevails not just programmatically but within the organization. She said it takes a real commitment to curate that culture within an organization, within a team itself, and to actually dedicate time to self reflection and to build on self awareness. That’s something that’s encouraged here, certainly with Bob and the board, this growth mindset.

What’s the biggest reward of working here?

It’s absolutely, 100% the kids. I find it to be a very good and lucky day if I’m with the kids.

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