Province selling Campobello properties with ties to 2 U.S. presidents, scandal

It's a place of world-class beauty that can also boast of connections to at least two U.S. presidents and one White House scandal — and you, too, can own a piece of it. 

The Province of New Brunswick is selling 74 properties on Campobello Island after previous owners failed to pay the taxes. 

Most of the properties were part of a failed business venture with ties to the Whitewater scandal that swirled around Bill Clinton, the 42nd president of the United States, in the 1990s. 

In all, the government is offering up nearly $860,000 worth of properties. More than half of the lots offered so far have sold — many of them well above assessed values, said Transportation Department spokesperson Mark Taylor. 

Given the hot real estate market, and the beauty of the island off Maine, Taylor isn't surprised by how many have been snapped up. 

"Campobello is a beautiful community, a beautiful island. So it's no surprise to us that there's been such strong interest in acquiring property on the island," said Taylor, whose department is managing the sale.

He said the number of inquiries and bids reflect "the appeal that the island has for people."

The province was so keen to sell the properties — most vacant and not bringing in any tax money for decades — that Transportation Minister Jill Green even starred in a government-made video to advertise the land. 

In the video, Green tells viewers that Campobello is a "wonderful place" for a summer getaway or year-round residence. 

"Imagine golfing on a golf course with friends or family with a view like this only minutes from your property," Green said as an aerial shot fills the screen of a golf course where the fairways stretch to the coastline. 

Summer home for FDR

She also mentions the island's connection to the 32nd president of the United States. Franklin Delano Roosevelt began spending summers on Campobello with his parents when he was a boy.

They were among several affluent American families lured to the island as a summer escape. His family fell in love with Campobello and soon bought property on the island. 

The property eventually became Roosevelt Campobello International Park and includes the 34-room "cottage" where Roosevelt and his family lived. 

Roosevelt continued regular visits to the island with his own wife and family until 1939, and his family continued to visit until 1952, according to the park's website. 

Two attempts to create a vacation mecca

The tiny island of 949 people certainly punches above its weight when it comes to connections to American presidents, and that history is interwoven with the properties now up for grabs on Campobello. 

Taylor said the island has a long history with American entrepreneurs who recognized its development potential for wealthy Americans looking to get away from the big city.

A group of American businessmen bought a good chunk of the island in 1881 and built three luxury hotels. The business model was based on the build-it-and-they-will-come philosophy, and the belief that once there, visitors would fall in love with the island and want to buy their own property and stay.

And in many cases, it worked, said Taylor. 

That's what happened to the Roosevelts. They were among some of the earliest visitors to the island and they soon bought their own property. 

One hundred years after the first attempt to turn the island into a vacation mecca for Americans, two Arkansas businessmen tried to do the same thing. In 1984, they purchased about 3,900 acres for $1.1 million, said Taylor. 

They managed to sell some of the subdivided property lots, but the entire project fell apart amid the Whitewater scandal. Essentially, one of the Campobello investors, Jim McDougal, was financial partners with Bill and Hillary Clinton in a real estate venture that ultimately led to the Whitewater political scandal of the 1990s. 

McDougal, who operated the Madison Guaranty Savings and Loan Association, was convicted in 1997 of 18 felony counts of fraud and conspiracy charges for bad loans made by Madison in the late 1980s.

Most of the properties on Campobello would eventually be turned over to the province for unpaid taxes — but not without ties to McDougal and his vision for the island, said real estate agent Ken MacTavish. 

As part of the original plan for subdividing the land, all lots are subject to membership in a homeowners association called the Campobello Island Club. 

"So they would have covenants attached to the land and restrictions on what you can do with it," he explained. 

There are also annual membership fees that have to be paid to the Campobello Island Club. According to the group's website, the fee is $108 a year. 

The group's president did not respond to a request for an interview. 

MacTavish said the covenants control what can be built on the land. For example, he said, mobile homes, recreational vehicles and campers are not allowed. Nor can the lots be used for short-term rentals. 

He said people should be aware of the covenants and their restrictions before buying one of the properties. 

They should also be aware that none of the properties are waterfront lots. 

As for the asking prices in the government sale, MacTavish said they're pretty close to market value. Generally, he said, a standard-sized lot without a water view would be assessed under $15,000. Those with a water view would be in the $15,000 to $30,000 range. 

Waterfront lots are the most valuable and generally run between $40,000 and $100,000. 

MacTavish said there is good news for those who buy inland lots — they do have access to public beaches that would only be a short distance away. 

The 74 properties acquired by the province were divided into four batches in an online sale, the most recent of which is scheduled to close on Monday.

There are 15 properties currently up for grabs, with a total assessed value of about $120,000. The cheapest property is valued at $10,400 and the most expensive is $38,900 for a 1.12 hectare (2.78 acre) parcel of land on Fundy Drive. 

The properties are being sold through a blind e-bidding system, where participants are asked to submit their bids online. The minimum bid is the assessed value, and the highest bidder wins at the end of the sale.

Twenty-five properties were available in the second batch of sales, which closed last month. Only half the properties sold. The lots had a total assessed value of $230,000. The successful sale of a dozen of them brought in almost $81,000 for the province. 

The cheapest lot, with an assessed value of $2,200, sold for $4,000, while the most expensive, valued at $38,900, did not sell. It did, however, garner two low-ball offers, one at $2,100. 

The property that sold the most over the assessed value was a parcel of land on Fundy Drive that was assessed at $3,800 and sold for $8,805. 

The first batch of 25 properties, which was sold last fall, was more lucrative — in part because the properties had a higher assessed value. They were assessed at about $315,000. But also, more of them sold. Sixteen of the 25 properties sold, bringing in more than $240,000. 

The properties that do not sell will be marked as "surplus" and will remain on the department's website under "open to offers." 

More Canadians interested

Historically, MacTavish said most of the interest in buying property on Campobello was from Americans. He estimated  that it was about 90 per cent American, 10 per cent Canadian. 

Thanks to the pandemic, he said it's now about 75 per cent American, 25 per cent Canadian. 

He said he's sold about a dozen properties in the last year alone, and most buyers said they intend to build fairly quickly. 

MacTavish said prospective buyers should be aware that Campobello has experienced the same supply-chain issues as the rest of the world.

Add to that, however, its unique physical connections to the mainland — in that the only bridge connects the island to the United States, not Canada — and the issues are even worse. 

Although part of Canada, Campobello's only land connection is by bridge to the Maine border town of Lubec. Direct access from Canada is by seasonal ferry only. That service was extended through the winter because of the pandemic.