The Lighthouse Keeper
BY DANIEL W. DRAKE ASSOCIATE PUBLISHER

The news that Stephen Karp con-tinues to add to his real estate portfolio on the island has caused varied reactions. Some express out-rage that one person controls such a significant amount of Nantucket’s retail and hospitality space. Some are indifferent, belonging to the the-morethings-change-the-more-they-staythe-same school. Others express enthusiasm, citing the stability and consistency that single own-ership brings.

Over the last 40 years, much of the soul of Nantucket as a tourist destination and several-sea-son playground has been shaped by two successive forces of very different natures.

The first force was the late Walter Beinecke, whose vision and persistence led, inter alia, to the construction of the Boat Basin, the rehabilitation of the Jared Coffin House and the White Elephant and Harbor House hotels, and to the restoration or refurbishing of many downtown buildings, some of considerable historical significance.

This column has previously noted that Beinecke was not without his detractors. On the other hand, Beinecke loved Nantucket and its people, and wanted to do what he could to help enable his friends to stay on the island and earn a decent liv-ing. It is probably safe, as well, to speculate that he, too, would be somewhat aghast at the scale of the fallout that has derived from what he started.

Nonetheless, out of Beinecke’s desire to do something useful for the community, combined with his foresight and his ability to execute, came much of Nantucket as it exists today.

Beinecke’s personal circumstances ultimately forced the sale of most of his commercial real estate holdings on Nantucket to Winthrop, a Boston-based real estate investment trust. Part of Winthrop’s early marketing pitch, if memory serves, was its managers’ familiarity with and affection for the island. However, Winthrop subsequently went through some tough financial times and the focus of the management effort, if it ever had been anything else, was to insure the highest possible return to the investors.

In terms of its impact on Nantucket, Winthrop’s goal was to maximize the number of people patron-izing its facilities and walking through the doors of the merchants who rented space from it. Winthrop actually was relatively benign (some might say insidious) in achieving its goal. The managers of that fund were not visionaries, but they knew enough to leave something alone if it was not broken. The effect was to increase significantly the num-ber of visitors to the island, but other than the direct consequences of that influx, Nantucket’s cityscape, as it were, didn’t change much during Winthrop’s reign.

In recent years, it came time for Winthrop to pay off its investors. Gradually, it has been divesting itself of its Nantucket holdings. Usually, when a real estate investment trust liquidates its holdings, a number of purchasers will step forward. In the pres-ent case, however, as Winthrop has reached time and again into its portfolio, only one person, Stephen Karp, has taken the properties.

Now, perhaps, another twenty-year cycle begins. And Nantucket is in the unusual, if not unique, position of having a significant portion of its destiny in the hands of a single entity or individ-ual for a third successive “generation”.

How this will play out over the next few years remains to be seen. What will be Karp’s legacy to Nantucket?

In the worst case, significant detrimental change could result where Nantucket’s character and com-munity slip away. Dumping ever more and more people into downtown on an August day will con-tinue to change the whole feeling of the town as well as the commercial mix of businesses, which will respond to cater even more to those who come here just for a day or so.

In the middle case, Karp will act much as Winthrop did; essentially passively, while making sure that the conditions remain to continue to attract the tourists and visitors which are the lifeblood of his ventures. The longer term impact of such an approach is not clear, but given the changes of the last few years, it is hard to imagine that the long term effects of even the middle case would be very beneficial to the larger community.

Karp has invested a whole lot of money in Nantucket. He has the right to expect a decent return on that money.

By the same token, to make such expenditure, he must have faith in the island’s future. But what is the future that he envisions? Some questions come to mind.

Is Nantucket a place where there is a range of tourist opportunities for people up and down the economic scale, or is it to be a playground only for the very wealthy?

Is it a place where an eager entrepreneur can start a restaurant or store without being choked by rents so high that very few independent merchants can consider affording them, or is it a place where only those seeking the panache of $50 entrees or original artwork will be able to eat or shop, and the dreaded chains will be the only retailers who will be able to afford to sign leases?

Is Nantucket a place where people are encour-aged to honor the island’s natural and physical resources, or is it a place where those resources continue to take a beating in the interest of not offending anyone or of driving them away?

Is it a place of fences and “no trespassing signs” or is it a place of freedom and good neighbors?

Karp cannot be expected to control or influence all of the factors which will result in the answers to these questions over the next few years, but the importance and visibility of his holdings means that, whether he likes it or not, he is in a position of leadership. The direction he signals will have a strong influence on others.

In the best case, Karp recognizes that he has bestowed upon himself a wonderful opportunity to influence Nantucket’s course over a good many years to come; that the future he sees is one with opportunities for everyone; that the future he sees is one which reveres the island’s resources rather than belittles them; and, that the future he sees is one which beckons “Come On In” rather than “Keep Out”.

Let us hope that Karp’s investments here signal a dual commitment: first, to obtaining a decent return on his capital and, second, to playing a strongly constructive and positive role, as Beinecke did before him, in the future of Nantucket. The first part of the commitment is the much easier of the two. The second part of that commitment can not be forced on anyone. It has to come from within.

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The “Lighthouse Keeper” reflects the views of the author and does not represent the editorial position of The Nantucket Independent. Please send any comments to drake@nantucketindepen-dent. com.

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