Nearly a year after the U.S. Navy stopped its bombing missions on the Caribbean island of Vieques, business has never been better. Which is giving residents something new to worry about. Matthew Yeomans reports
Laurel Axen

High up on "gringo hill," a tropical-forested peak on the western end of Vieques, British developer Stuart Hankin admires the view from the swimming pool at Lionheart, his new luxury villa. Directly below lies Esperanza, the island's second-largest town, and beyond that the southern coast proceeds in a chain of tranquil half-moon bays and coves.

Hankin is putting the finishing touches on a project he began nearly two years before. When Lionheart opens for business early this year, he will rent the six-bedroom duplex for up to $10,000 a week. He has no doubt he will make money. "There are no turnkey vacation houses left on the island," he says.

Now that the U.S. Navy has finally abandoned its contentious live-fire training base on this island off Puerto Rico, Vieques has become one of the Caribbean's hottest destinations, and the place is alive with a giddy mix of both optimism and trepidation. On the one hand, the island finally seems set for a spectacular rebirth. But on the other, many here worry that one behemothmight soon be replaced by another: mass-market tourism. And while residents are aware that more visitors, and new developments like Hankin's, could radically improve Vieques's fortunes, they also wonder who will ultimately benefit, and they fear that change might spoil an island beloved for its decidedly friendly, low-key atmosphere.

Very few people mourned the departure of the navy in May 2003. For almost 60 years it had controlled about two-thirds of the island, which is about half the size of Antigua. Although civilians were allowed onto those beaches not used for military exercises (the navy owned some of the best), they were forced to live on a small strip of land running down the middle of the island. What's more, Viequenses had long insisted that the navy's exercises—sometimes using depleted uranium shells—demonstrated a callous disregard for the environment and residents' own health and safety.

After a local security guard on the base was killed by a bomb dropped in a training mission in 1999, a series of vehement protests both on Vieques and in cities such as New York made headlines around the world; suddenly, an island known as little more than a Caribbean backwater achieved notoriety for bombing runs and mass arrests. So the owners of local tourist businesses—nearly all mainland American or European expats—were just as relieved as native-born Viequenses when the navy pulled out.

In terms of business, the benefits were immediate. For the first time in memory, the island enjoyed a summer tourism season, thanks to the publicity surrounding the navy's exit. At press time, hoteliers were anticipating a flood of sunseekers during the winter months. Car-rental agencies reported being booked solid since December. But perhaps the biggest upturn has been in the vacation real estate market. Local agents and developers estimate, conservatively, that prices have jumped more than 25 percent, driven both by regular visitors wanting to secure a piece of paradise and by speculators looking to make a quick profit. The appeal is obvious, says Hankin: "Vieques is the last undiscovered spot under the U.S. flag in the Caribbean."

"It's like a land rush," says Lin Wetherby, the owner of Rainbow Realty, who moved to Vieques eight years ago from Massachusetts in search of the quiet life. "Now I'm working harder than ever." Vacation houses are selling for upwards of $500,000, and everything from fixer-uppers to grand villas has been snapped up. This has been great for Wetherby, but even she fears it could be too much too soon. "I'm not sure how we're going to handle the influx," she says. "We just don't have the infrastructure to support it in terms of water or electricity."

While eager property hunters descend this winter, the Committee for the Rescue and Development of Vieques, the same organization that led the protests against the navy, is grappling with the repercussions. It has proposed a variety of strategies ranging from a moratorium on the sale of coastal land to the establishment of a land trust that would enable locals to sell land to the Viequense community rather than to outsiders. So far, no measures have been adopted, but something needs to be done, says Robert Rabin, one of the committee's leaders.

The committee fears a scenario in which islanders are not only pressured to sell their houses but also unable to afford new ones and thus forced to relocate. Yet others on the island downplay this possibility. Most Viequenses' houses, they note, are simple structures clustered in barrios—hardly the type of properties tourists are after. A more legitimate concern is the race to snap up land: plots are now priced well above half a million dollars. Although that doesn't appear to threaten locals' current existence, it does create resentment. Many residents are concerned that, even as the economy grows, they will be no better off than before.

If the experience of neighboring St. Thomas is anything to go by, it's not the changing real estate market Vieques needs to worry about—it's the emergence of the kind of mega-resorts that have given St. Thomas the reputation of being the Caribbean's Ugly American. And that's why Vieques's only full-service resort, the recently opened Wyndham Martineau Bay Resort & Spa, has come under so much scrutiny.

With 156 rooms spread out in a plantation-style setting on the north shore, Martineau Bay is far from a towering eyesore. Still, some in the community argue that it represents exactly what Vieques doesn't need: a large resort managed by outsiders. Ben Tutt, Martineau Bay's Colorado-born general manager, points out that more than 80 percent of his employees are island natives. Equally important, the resort has initiated a program to teach employees the hotel business, in an effort to redress their lack of experience—one reason residents haven't owned and operated many tourist businesses.

Tutt thinks the time is right for Vieques to capitalize on its assets. During the past few months, he has been in the enviable position of having to turn people away, but he would welcome more competition. "I'd love to have three or four other hotels here that we could co-market with," he says.

For the moment, it's the smaller places to stay that are reaping the benefits of Martineau Bay's arrival. The opening of the resort generated free publicity, which, coupled with the navy's exit, helped fuel the current growth in tourism. Boutique hotels such as Hix Island House, Hacienda Tamarindo, and the Inn on the Blue Horizon are all looking to expand; Blue Horizon is adding 14 villas to its waterfront property.

That's the sort of low-impact development James Weis, Blue Horizon's owner, hopes will be in Vieques's future. "You are going to see an appropriate amount of building that will enhance things here," he says. The task now is to manage the change. "I feel partly responsible for making Vieques a tourist destination," adds Weis, who has operated the inn for more than a decade. "I'd hate to see this ruined."

This being a small island, however, rumors abound. Talk in the beach bars is of front companies representing Manhattan real estate moguls and of golf courses sprouting in the heart of the island. Although there is no evidence that any major new developments are planned, the gossip shows how aware locals are that Vieques is caught up in something that could be beyond their control.

And so it's ironic that the one fact Viequenses still resent most could prove to be their salvation in the fight against overdevelopment.

After the navy's exit, a fraction of its land was returned to the community, but most passed to the U.S. Fish & Wildlife Service to be turned into a nature reserve. Activists like Rabin accuse the U.S. government of arranging the transfer to avoid a comprehensive cleanup of the land (Fish & Wildlife lands have a lower standard than land designated for human habitation). Many Viequenses are simply angry that a portion of their island is still controlled by the government. But as long as Fish & Wildlife controls the land, no one can build on it, and developers will be restricted to the same strip of the island that Viequenses live on, land that largely lacks the access to the prime beachfront that all resorts desire.

As locals stew over a victory they feel is only half won, so developers must nonetheless be eyeing some of the last virgin beaches remaining in the Caribbean. Which is why keeping the former navy lands in limbo may not be such a bad thing. The local community has been busy drafting a plan for sustainable development, with guidance from experts at Columbia University, MIT, the United Nations, and others. It envisions low-impact ecotourism as well as the return of land to farmers and small businesses. Yet fostering this type of development will take a great deal of long-term government support and protection, which could someday collapse in the face of developers' lobbying efforts and lucrative bids.

"This is my island," says Osvaldo González, the owner of Vieques Air Link, one of the largest locally owned companies. "If I want to go fishing, I shouldn't have to leave at six p.m. just because Fish & Wildlife says I have to." The people of Vieques, it seems, are still a long way from controlling their own paradise, but for the moment, that's better than having a paradise lost.

MATTHEW YEOMANS last wrote for T+L about Texas's Gulf Coast.