The fishing wharf on Campobello Island, N.B.Chris Donovan/The Globe and Mail
When the two American developers arrived with their cowboy hats, pointy-toed boots and southern accents, talking about building an “island paradise,” some locals viewed them with squinty-eyed skepticism.
But by the mid-1980s, Campobello Island’s herring factories were closing and the island’s 1,500 residents needed jobs. Larry Kuca and Jim McDougal’s plan to turn Campobello into a coastal getaway for moneyed American visitors – complete with a marina, shopping centre, water slide, air strip and ski hill – represented some much-needed investment.
Almost as soon as they bought land on the island, the Americans were dogged by legal problems south of the border. Namely, the Whitewater scandal, during which the two men were drawn, along with Bill and Hillary Clinton, into an FBI investigation related to a failed attempt to sell vacation properties in the Ozarks. The legal and financial fallout scuttled their Campobello dreams.
Now, about 40 years later, the land Mr. Kuca and Mr. McDougal hoped to turn into a vacation hot spot on the Bay of Fundy may finally be developed. In an online auction starting Monday, the New Brunswick government is selling the first of 74 lots from the pair’s original purchase, after acquiring the properties in a bid to recover unpaid taxes.
“I think the time is right to get these properties in the hands of other people, so they can enjoy this beautiful island, and get some revenue back to the province,” said Jill Green, Minister of Transportation and Infrastructure.
A view of Lubec, Maine, seen from Campobello Island, N.B.Chris Donovan/The Globe and Mail
In January, 1984, the Arkansas pair bought nearly half of Campobello Island, paying $1.1-million for 3,900 acres, and began building roads and subdividing their land into smaller plots. They put up a giant billboard for their new venture, which they called the Campobello Company. They advertised building lots and started touring around in a helicopter.
“We’re all old fishermen here, that’s our roots, so we were naturally suspicious,” said Theresa Mitchell, a lifelong Campobello resident who worked for the pair when she was a teenager, cleaning rooms and preparing meals in a guesthouse used to host potential buyers.
“We all wanted to know, who are these guys? They were something different than we’d ever seen before.”
They sold about 100 of their 700 lots on the island before they ran into trouble. In that time, they attracted some influential partners, including Sheffield Nelson, a former candidate for Arkansas governor who at the time was a member of the Republican National Committee, and Jerry Jones, the billionaire owner of the Dallas Cowboys. But they never came close to achieving their vision with the Campobello project.
The Tyn y Coed and Tyn y Maes hotels, pictured in 1884, were quickly constructed by the Campobello Company to provide guests and potential future cottagers 'with all the comforts of a refined home.'Supplied
Some of the Campobello Company’s land, including several one-to-three-acre oceanfront properties, was previously sold in tax sales dating back to 2008. But Ms. Green is hopeful the bulk of the land will finally find new owners in today’s red-hot real estate market, which has been fuelled by out-of-province buyers. More tax sales are expected in February and March, she said.
While the scale of the developer’s plans in the 1980s may have seemed out of touch with the island’s rustic charm, Americans have long been a part of the fabric of Campobello. Many of the earliest settlers were New Englanders, who intermarried with Welsh fishermen to give the island an accent all its own.
Cottages here fly both countries’ flags. Islanders root for the Boston Red Sox and New England Patriots, carry U.S. currency in their pockets and often earn paycheques in Maine, which is located a few hundred yards away, on the other side of Campobello’s only bridge to the mainland.
The model for Mr. Kuca and Mr. McDougall’s plan was forged a century earlier, when a consortium of Boston and New York businessmen built three luxury hotels on the island.
Former U.S. President Franklin Roosevelt with his parents Sara Delano Roosevelt and James Roosevelt on the porch of James and Sara's Campobello summer property, around 1900. Campobello Island was a popular destination among influential Americans in the 19th and early 20th centuries.Supplied
The resorts catered to wealthy Americans fleeing the heat of crowded U.S. cities. Among the affluent families who came and ultimately bought property on Campobello were the Roosevelts, who brought their son, future U.S. president Franklin Roosevelt, every summer.
In much the same way Mr. Kuca and Mr. McDougal envisioned in the 1980s, visitors in the 19th century came first as guests of the hotels, explored Campobello’s rugged beauty and were encouraged to buy a piece of the island for themselves.
“The idea was you’d fall in love with the island, purchase a piece of land adjacent to the hotel and you’d build your own summer retreat,” said Will Kernohan, manager of interpretation and curator at Roosevelt Campobello International Park, which operates tours of the Roosevelt family’s summer home and property on the island.
“The island is staggeringly beautiful. When you come here and see it, it’s easy to understand how it would have been a magnificent resort.”
Unlike their early predecessors, however, the Arkansas developers never got that far. As their legal troubles grew in the U.S., they stopped visiting Campobello, and soon locals began reading about the Whitewater saga.
A shipwrecked boat on Campobello Island, N.B.Chris Donovan/The Globe and Mail
Mr. McDougal, who died in prison in 1998, was convicted of 18 felony counts of fraud and conspiracy charges after he attempted to cover the losses from his failed Ozarks development with millions in savings-and-loan funds.
Mr. Kuca, who avoided prison time by agreeing to testify at the Whitewater trial, was given two years probation for misappropriating money. The Campobello Company collapsed after that.
Ms. Mitchell said she never had any issue with the pair from Arkansas, and was always paid on time. Islanders were stunned when they saw stories about the criminal investigation into a vacation property scheme not unlike the one the two men were trying to build on Campobello, she said.
In the years since, the island’s population has steadily shrunk to about 800 people. Ms. Mitchell is hopeful the empty land the developers imagined as part of an exclusive island getaway will finally attract new owners. Campobello Island, which has seen waves of American investment before, needs new blood, she said.
“We need new people on Campobello,” she said. “Otherwise, we’ll become a ghost town.”
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