Development: Trading Up Nantucket

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Not long after Ahab navigated the Pequod out of Nantucket, Mass., in search of Moby Dick, the economy of the small island off Cape Cod began to stagnate. With the whalers gone, the population dropped from 17,000 to 3,500 and construction stopped altogether, so that today 60% of the houses predate 1840, and only the scallop industry survives, grossing about $200,000 a year.

Tourism is another matter. Nantucket has become a favorite summer resort and tourist attraction. The population jumps to 16,000 in July and August; last summer 200,000 sightseers overran its quaint cobblestone streets and lolled on its beaches. Salty natives sneer that one-day visitors "come with a five-dollar bill and a dirty shirt and change neither." Nevertheless, local businessmen gladly pocket the $20 million a year spent annually on bus trips, postcards and clam chowder. In fact, the tourist trade is growing so rapidly that many "off-islanders," the regular summer residents, are concerned lest their historic hideaway lose its charm.

Walter Beinecke Jr., 50, heir to a sizable chunk of his family's Sperry & Hutchison Green Stamp fortune and a successful real estate developer and cattle rancher in his own right, thinks he has a solution for old Nantucket's people problems. Beinecke's idea is to "trade up" the island by finding fewer people who will spend more money. "Instead of selling six postcards and two hot dogs," he says, "you have to sell a hotel room and a couple of sports coats."

Fewer Passengers. To trade up, "Bud" Beinecke has been buying up. To attract yachtsmen, he and a Nantucket partner have bought out most of the deteriorated wharf front and constructed a large shopping center and marina complex that has tripled the number of yacht berths. To keep some of the penny-ante trippers away, he has refused to renew the lease on his docks for one of the excursion steamers out of Hyannis and demanded that the other carry fewer passengers at higher rates. To upgrade the mainstreet shopping area, he has bought up 80% of the commercial acreage in town, elbowed out marginal enterprises and replaced them with tony shops selling needlepoint and native-woven material.

Beinecke, who spent his first summer on Nantucket at the age of two, expects his commercial interests to turn a profit eventually—but money is not his main motive. He plans to turn his commercial holdings over to a foundation that will spend at least half the income restoring and maintaining historic buildings. Along with other off-islanders, he has also bought up undeveloped land for conservation. Basically, he explains, he is trying to preserve the island as it used to be.

Through a trust set up in 1957, he has poured millions into restoring churches, houses and landmarks. One of the oldest churches on the island has been missing its steeple since it blew away in a hurricane a hundred years ago. Beinecke has had a replica of the original steeple made in Boston, and next month will fly it over and install it by helicopter.