Billionaire Craig McCaw is Selling His Island Paradise for $75 Million. Too Bad It Was Stolen.

By on September 12, 2014 in ArticlesEntertainment

In this day and age, billionaires can buy just about anything they want. Craig McCaw is a major telecommunications billionaire with a reported net worth of $1.8 billion. He owns properties around the world, and all of the perks that come with having a ridiculous amount of money at your disposal. He recently decided to offload some of his property, by putting his private island on the market. Yes, you read that correctly. Craig McCaw owns an island, just off the coast of Victoria, Canada, called James Island.  It's a gorgeous property and even with an astronomical price tag, more than one person has indicated interest in snatching it up.  There's only one small snag.  The island was stolen from the original owners in the early 1900s, and now the ancestors of the original owners want it back.  What seemed like it was going to be an easy transaction between billionaires, just got a lot more complicated.

Craig McCaw was born in Centralia, Washington, and grew up in a family led by his father, an intermittently successful businessman whose wealth was based on buying up television and radio stations and selling them again.  Unfortunately, by the time his father passed away, McCaw's family was in significant debt.  Craig McCaw went on to attend Stanford University.  During his final year at Stanford, he took over management of the one station that had not been sold off to pay his father's debts.  He slowly turned the stagnant cable company around, and then began using the profits to buy up other companies.  His business savvy paid off, and he grew a successful empire from the ashes of his father's former business.  The company grew to become the 20th largest cable carrier in the US.

In the 80s, when cellular rights became available, McCaw entered the cellular rights lottery and also bought up the rights from other businessmen and women who had won their rights via lottery.  He worked quickly and aggressively, effectively building a major cellular conglomerate before anyone, including landline companies, realized exactly what was he doing.  By the early 90s, he'd become the highest paid CEO in the US, and had purchased other major cellular companies, such as MCI.  He sold his company, McCaw Cellular, to AT&T in the mid-90s for $11.5 billion.  He then took over a struggling Nextel, and turned the company around, eventually merging with Sprint in 2005 in a $36 billion agreement.  A year later, he sold the company outright to Sprint for $6.5 billion. Since then, he has launched and closed a broadband satellite communications company, and then founded Clearwire Corporation.  He served as Chairman of Clearwire until 2010. 

Over the years, he has amassed a major fortune. His net worth peaked at $2 billion right after the AT&T deal. Three years later, when he divorced his wife Wendy, Craig paid her a $460 million settlement. Ouch. But Craig is still a billionaire and has purchased a number of expensive items.  In 2012, he bought a 1962 250 GTO for $35 million.  It was the most expensive car ever sold to that point.

Interestingly, he purchased his Canadian island property, James Island in 1994, for just $19 million.  He sued the company that had manufactured munitions on the island for decades for $5.3 million.  The munitions factory had caused major environmental damage and the courts ultimately awarded him $4.75 million in order to "re-green" the land mass.  He banned the use of pesticides, required power lines to be built underground, required the use of electric cars, and slowly re-grew the area into his own private paradise.  It's the second largest privately owned Gulf Island, and now sports his 5,000 square foot home, an airstrip, six cottages for friends and family, an 18-hole golf course designed by Jack Nicklaus, and an entire town constructed to look like the Old West.  It's his own 780-acre playground.  In 2012, he put the island on the market for $78 million.  It didn't sell.  This year he "bit the bullet" and reduced the price… to $75 million.  However, selling the island has proven to be a lot more complex than he ever anticipated.  It turns out that the complicated history of James Island resulted in Craig McCaw purchasing what was basically stolen land.  Now that he's trying to sell it, the original owners want it back, and they're not interested in paying $75 million for it.

Like much of Canada, the land was originally owned by various native groups. James Island was originally owned by the Tsawout First Nation peoples.  However, it was not part of the Douglas Treaties, so the Tsawout still owned it.  However, in the early 1900s, the aboriginal population was "moved" from the island.  The Tsawout First Nation has tried to regain control of the island multiple times, and there are currently two land claims in the courts.  During World War II, when the aforementioned munitions factory was built on the island, it was constructed on top of an unmarked Tsawout cemetery.  The Tsawout First Nation was led to believe that they would be able to reclaim the land after WWII, but this turned out not to be the case.  Instead, the island has passed through multiple owners, eventually ending with Craig McCaw.

Since 2012, theTsawout have doubled their efforts to reclaim the island before it's sold to someone else.  It's made Craig McCaw's ability to sell the island even more difficult than some of his major business mergers.  Whether he will be successful remains to be seen.  It will require the Canadian courts to ask and answer some important questions about land ownership, and could set game-changing precedents about how the sale of native lands should occur in the future.  Whatever happens, there's a good chance that Craig McCaw is finally facing his first real losing businesss proposition.  With a net worth of $1.8 billion, however, it's difficult to dredge up a lot of sympathy for a $75 million loss.

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