A Resort Developer Swaps High-End Homes

WSJ

By Nancy Keates

David Johnson broke his neck in a swimming-pool accident when he was 28 and was told he would be permanently paralyzed. Within a year he was walking again—and he hasn’t stopped moving since.

The high-end resort developer has moved in and out of 11 homes in the past 19 years in Bay Harbor, Mich., a development he masterminded that fronts Lake Michigan. His next planned move there is into a 7,000-square-foot house on the lake that is undergoing a $2 million renovation. For an occasional retreat, he heads to nearby South Fox Island, where he owns two-thirds of the land and possesses its only residence, a 5,000-square-foot house built for $1.5 million.

In December Mr. Johnson, 64, moved into his new winter home—a $6 million, 5,300-square-foot beachfront five-bedroom on a peninsula in the British Virgin Islands called Oil Nut Bay. He found this area after traveling to 13 countries seeking the right spot, living for months at a time on his 130-foot-long yacht called “Resolute.”

It is also a suitable name for a developer whose grand plans have, at times, run into opposition. “I am relentless and cannot be defeated or overwhelmed,” Mr. Johnson says. “There is always a solution that creates a win-win outcome.”

Raised in Detroit, Mr. Johnson began his career leasing and operating gas stations in college, hiring his fraternity brothers from Michigan State University to pump gas, and moved on to mass housing developments. After his swimming-pool accident, he shifted to higher-end, lower-density resorts.

In 1989 Mr. Johnson bought all the private land on South Fox Island, a 2,100-acre remote island in the northern part of the state. His idea was to create the “Nantucket of the West.” Then things got complicated: He bought neighboring North Fox Island to stop another developer there and eventually sold it to the state. He then swapped land on South Fox Island with the state to get a contiguous parcel—a deal that went through but was controversial among environmentalists and an American Indian tribe that laid claims to some of the land (those claims were later dismissed by a judge). In the end, he decided to turn South Fox into a private retreat

In 2001, he built a 5,500-foot runway that could handle a Gulfstream V and a $1.5 million home on the water’s edge. Just as construction was nearing the end, a chunk of the island broke off, leaving the house 12 feet away from the lake. Mr. Johnson spent an additional $1 million putting the 388,000-pound house on top of a platform with 99 wheels to roll it farther up the coast.

The five-bedroom, five-bathroom home looks a little like a park lodge from the 1930s. It has walnut floors, a mahogany-paneled office, a yoga room and a master bedroom with sweeping views of the lake. Mr. Johnson and his wife, Pam, keep 19 horses in stables on the property and get around on ATVs.

As the South Fox Island drama was unfolding, in 1994 Mr. Johnson moved on to developing the site of an abandoned cement plant and limestone quarries on 5 miles of shoreline on Lake Michigan. Called Bay Harbor, the 800-home resort has 32 neighborhoods (essentially subdivisions) and golf courses, an equestrian center and a yacht club.

Over the years that followed, he built or bought 11 homes in Bay Harbor—he and his wife and two daughters would stay in one for a few years, and then sell and move to another. “My wife jokes I’m going to sell her next. But that’s not an option. Not her or the dog,” he says.

The strategy helped the development weather hard times (the economic downturn, a lawsuit over water pollution that was later settled). “He created a confidence by living there,” says Jaime Turnbull, former vice president at Mr. Johnson’s company, who lives in a home in The Parks at Stonewood, a development Mr. Johnson built in Clarkston, Mich.—and where he still owns a four-bedroom, seven-bath estate and equestrian facility.

Mr. Johnson’s present home in Bay Harbor is a four-bedroom “cottage” that he bought in September 2010. His next home, being remodeled for $2 million, has the lake on one side and a marina on the other. There is a chef’s kitchen (for a chef who travels with the couple) and a regular kitchen. He also owns a penthouse that he stays in occasionally.

While he was home-hopping in Bay Harbor, Mr. Johnson built a 130-foot yacht and lived on it for months at a time during a 10-year period beginning in 2000. He visited 13 countries with the goal of finding the perfect warm-weather spot to start a new development—one with natural beauty, good water for boating, minimal corruption and crime, government stability and, most important, an exit value that would make the investment worthwhile.

The winner was the British Virgin Islands, where he bought two properties in Virgin Gorda’s North Sound: a resort hotel called Biras Creek Resort in 2006 and Oil Nut Bay in 2008.

The process was anything but smooth, involving complications with regulations and a partnership with a local family that went sour.

Mr. Johnson is now proceeding with plans to further develop 400-acre Oil Nut Bay, which has homes and lots for sale ranging from $2 million to $30 million. His house here has arched wood roofs and a front door that is 10 feet high and 30 feet wide. There are five bedrooms, including one for their chef, who has his own commercial kitchen. The interior is mostly white and the bedrooms’ sliding doors open the walls to the outside.

Like most serial movers, Mr. Johnson always has an exit strategy. This house is on the market for $10.95 million and his architect has just finished designing his next house in a different neighborhood.

Write to Nancy Keates at nancy.keates@wsj.com