By Shannon Behnken - Tampa Tribune - Jun 5, 2005

A place to dock your boat, throw up a hammock and be disturbed by no one. A piece of paradise. An island.

The old real estate adage about “Location, location, location” rings true, especially when it comes to land surrounded by bodies of water, some of the most desirable property in Florida.

There are about 470 islands in or off the coast of Florida. Most are owned by the government and used for conservation, but a good chunk offer their owners a private slice of heaven. For those with the cash—lots of cash—there are more than a dozen islands for sale, dotted across and around the state in bays and in rivers and off the coast—and many, depending on location, are in high demand.

Paradise, though, can have its costs.

Island owners can count on spending 50 percent to 75 percent more to build structures on an island than on the mainland. Insurance? Forget it. And a confusing web of state and local bureaucratic rules make it difficult or expensive for sellers to market their property or develop their dreams.

Just ask Tampa resident Joe Ramsey.

He owns a 1.65-acre island in the Alafia River, just east of U.S. 41 and a 10-minute boat ride away from the mouth of Tampa Bay.

Ramsey, 65, paid $13,600 for the vacant property in 1980.

He had big dreams: To build condos and a pagoda-type structure to serve as a restaurant or bed-and-breakfast; place hydraulically stabilized floating structures around the island; offer ferry rides and organize water sports. He looked into building a bridge and installing a helicopter landing pad.

Today, Ramsey’s island looks pretty much the same as when he bought it 25 years ago.

Like many island owners, he found the cost of development and the headaches of navigating local and state regulatory agencies was too overwhelming. The island is for sale, and he and his wife, Janet, hope to get $5 million for it.

“It’s a matter of money,” Ramsey said. “There are obstacles, but money and the desire will overcome any obstacle to developing this island. The island had potential when I bought it, but the timing wasn’t right. This area is like gold now; the time is right now.”

Ramsey has had the property on the market for nine months, however, and interest has been thin.

In Florida, there are nearly 20 islands for sale, ranging from $450,000 to more than $20 million. Some of them, depending on location and access, sell within a few weeks; others have been on the real estate market for six months or longer.

Web sites such as Private Islands Online also have made it easier to purchase islands by keeping track of listings around the world. In addition to Florida islands, there are islands listed for sale in Alaska, California, Connecticut, New York, Tennessee, Virginia, and five other states.

Here’s a sampling:

Sunset Key: Located in the mouth of the Anclote River in Tarpon Springs, the ad touts 2.1 acres, a private beach and a floating dock. Water can be supplied by a well or desalination unit and fresh water has been found on the island, the ad promises. The cost: $1.5 million.

Isle of St. John’s: This is the largest Florida island listed on the site. It’s at the mouth of Lake George and has 225 acres. The ad says up to 90 residential units can be developed and the island already has two log homes. Cost: a whopping $19.5 million.

Douglas Lake Island, Tenn.: A 20-acre island on Douglas Lake, 35 minutes from Gatlinburg and on the north side of the Smokey Mountains. Its ad describes 550 miles of shoreline, coves, and mountain views. Cost: $1.35 million.

* Freedom Island, Maine. The ad calls it “a four season paradise.” The gated private 13-acre island is accessible by a causeway and has a 4-bedroom home with an indoor heated pool and hot tub and wrap-around porch. The property also has a two-story, four- car garage and an attached boat house. Cost: $1.7 million.

Looking for an island that already has some kind of development on it is a good idea, advises Brian Schmitt, a Coldwell Banker real estate agent who has sold a dozen islands in and around the Florida Keys. He estimates there are about two dozen privately owned and developed islands in his region.

Island real estate is in hot demand, Schmitt said, but if there isn’t a structure of some kind on it already, marketability drops dramatically.

“It will be essentially impossible to develop,” he said. “Unless there’s some development already there, they’re not that usable.”

Most of the development of islands is regulated by local municipalities. In Schmitt’s Monroe County, an island has to be at least 40 acres to be developed.

That doesn’t scare off buyers. Just last week, Schmitt sold a 13-acre island near the Keys for $3.8 million. It has a causeway, which Schmitt credits to helping the island sell within two weeks of going on the market.

It’s tough to quantify islands in Hillsborough County because no agency keeps track of them. The Hillsborough County Property Appraiser’s Office estimates there are three or four islands in the county, but that’s a guess, said Warren Weathers, deputy appraiser.

The Hillsborough County Planning Commission also can’t give a firm number, but planners there recalled more islands.

Calls to numerous county agencies confirmed island owners’ frustrations. No one knew the rules for island building and where an owner should go to get answers.

“In 30 years with the county, I’ve never seen anyone develop an island,” said Craig Mahlman, manager of site plan and review for Hillsborough County. “We just haven’t done that.”

Renee Redmond, director of operations at Private Islands Online, based in Toronto said it’s not unusual for buyers to spend all their cash on the island and not have enough left for development.

“You could spend the same amount as the purchase price on development,” Redmond said.

Some building experts have estimated that construction on an island can cost 50 percent to 75 percent more than on the mainland, Redmond said. For example, she added, equipment and labor must be brought in on a barge.

It costs, on average, about $100,000 for things such as a septic system, water installation and to hook up satellite systems for communication, according to Private Islands Online. You can count on an additional $10,000 for maintenance.

Some aren’t suitable for construction at all, or at least not easily.

“One must do their due diligence before they buy,” Redmond said. “Some come with permits for building, but with others, you’re on your own.”

Insurance Impossibility

Insurance is another hurdle. In Florida, you can pretty much forget getting traditional homeowner insurance for island property.

The state-created Citizens Property Insurance Corp.—the insurer of last resort for homeowners unable to secure coverage in the private market—insures some islands for “wind only” policies, spokesman Justin Glover said. That will cover hurricane damage only.

For the rest of the insurance, some chose surplus lines, policies sold by carriers without a Florida license that aren’t regulated by the state and are generally costly. Others don’t insure their islands at all.

Emilio Cirelli, 48, owns three islands in Florida and 150 acres of pieces of other islands.

The full-time real estate investor bought his first island in 1995 for $306 in a delinquent tax sale. He is under contract to sell it for nearly $1 million. He was told it would cost $250,000 to bring utilities to the island.

He sold a 10-acre island for $70,000. He paid $7,000 for it and sold three months later.

Despite his success, Cirelli said he hasn’t been able to come up with enough cash to build a dream home. For now, he takes his wife and three children for occasional camping trips on the islands.

“I’ve always been intrigued about having a personal piece of land surrounded by water,” said Cirelli, who lives in Ormond Beach. “Building on islands, though, is only for the elite.”

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