The Balboa Brief: The Island Nobody Wanted (July 2026)
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The Island Nobody Wanted
"What stands in the way becomes the way." — Marcus Aurelius
With our country celebrating 250 years of sovereignty, this month's Balboa Brief revisits the origins of Balboa Island, a place that, fittingly, was saved by a Fourth of July party.
If you walk out to the end of Marine Avenue on a July afternoon, past the line for Balboa Bars at Dad's Donut, past the golden retrievers tied up outside Irvine Ranch Market, past the eucalyptus dappling shade over barefoot kids dripping ice cream onto the boardwalk, past conversations about the twelve-foot waves at the Wedge and Big Canyon's firework show, you reach the South Bayfront seawall. And if you look back at the shingled cottages behind you, it may be difficult to comprehend that a century ago, nobody wanted any part of this.
Least of all James McFadden. He was the founder of the Newport township, and to him the low mudflat in the middle of the bay was nothing but an obstacle, a sandbar blocking the shipping channel of his "new port." The locals called it Snipe Island, home to seabirds, mosquitoes, and little else. At high tide the island disappeared beneath the water. At low tide it exhaled the smell of wet salt and rotting kelp across the peninsula. So in 1902, when a Riverside promoter named William Steppe Collins offered to buy nearly nine hundred acres in and around the bay, much of it underwater, for a price of around fifty thousand dollars, McFadden took the deal gladly. By most accounts, he walked away believing he had just unloaded worthless swamp on a sucker.
Collins, for his part, believed he could make money out of sand. He looked at a half-submerged mudflat and imagined a neighborhood, and named it, with a promoter's flair, after Vasco Núñez de Balboa, the Spaniard who had waded into the Pacific in 1513 and claimed it for a kingdom that would not last. Both men left the closing table certain they had fleeced the other, but the actual winners of the 1902 trade hadn't shown up yet.
Collins did not lack resources. He took on Henry Huntington, the railroad tycoon, as a partner, and by 1906 Huntington's Pacific Electric Red Cars were delivering prospective buyers down from Los Angeles and old-money Pasadena. Meanwhile Collins' dredge sucked silt out of the channel and piled it onto the mudflat until the ground stood a few feet above the tideline, and Balboa Island emerged. He drew the lots into a grid so tight that neighbors on Park Avenue could hand a bowl of sugar across the alley without stepping outside. Then he named the streets after gemstones: Agate, Amethyst, Ruby, Sapphire, Emerald. One street, Apolena, he named not for a stone but for his wife. He was selling wet sand, and he wanted the buyer to see jewels.
Nobody wanted the Balboa Island lots.
Collins didn't give up. He printed brochures showing an elegant hotel that did not yet exist and offered lots for three hundred to six hundred dollars, future improvements included. With only half the lots sold, he was without the money for sewers, streets, and streetlights the brochures had promised. What the buyers actually got was a fourteen-inch wooden seawall, patched with cheap German cement, and cottages with no gas, electricity, or heat. Families lit their evenings with coal-oil lanterns, used outhouses behind the summer cottages, and buried their trash in the vacant lots next door. By 1911 the island was emptying out. The seawall was too low and the tide too often flooded the houses. Owners who could stomach the loss walked away, and the newspapers questioned whether the whole experiment had been a mistake.
Collins had one card left, and he played it on the Fourth of July, 1914: a blowout party like Newport had never seen. Eight thousand brochures. Races, parades, tours, thousands of visitors, and seven hundred lots sold in the aftermath. It was a promoter's masterpiece, and it was also his goodbye. Collins was overleveraged. He had sold every lot with improvements promised in the price, and the dredging was ruinously expensive. Seven hundred sales could not fill a hole that deep. Within a year he sold what he could, left, and eventually went bankrupt. But the party delivered the island's future: seven hundred new families who would keep a fading dream alive. The unsold lots went back to the Los Angeles banks, who let them go for as little as twenty-five dollars apiece. Speculators bought entire blocks. Newport Beach annexed the island in 1916. A few years later an exasperated mayor put it plainly: "The island is a dump. It was sold by a lot of damn crooks to a lot of damn fools."
The fools stayed. The lot owners who remained formed the Balboa Island Improvement Association and earned a new seawall, sewers, paved streets, gas lines, and a wooden water tower on Agate Street. When Collins developed the island, he had kept a ring of waterfront land running around the island's outer edge. After his bankruptcy, three lot owners paid the back taxes on it and donated the ring to the city of Newport Beach. That land is today's public boardwalk along the Bayfront. One of the three was Joe Beek, a kid who had sold lots for Collins to pay his tuition. In 1919 he won the ferry contract as the only bidder, operating a rowboat summoned by telephone, and the franchise has stayed with his family to this day.
Collins Island, where the founder built a concrete castle for his wife Apolena, also passed from hand to hand: Hollywood star Roscoe "Fatty" Arbuckle rented it in the twenties, while urban legend says James Cagney won the island in a 1938 poker game. Then the Coast Guard commandeered it during World War II. Finally in 1953, a year after Collins died, the castle came down to make room for eight more homes. A century later, the twenty-five-dollar lots on Balboa Island are still here, some with their original cottages, and a few still held by founding families.
This is the honest version of investing. First, being right and making money are often two different skill sets. Collins was right about nearly everything. His vision became jewels exactly as the street signs promised. The smartest, best-connected man in the story died having captured almost none of it. The fortune went to people with no exit plan. Investing rewards intelligence less than we'd like to believe and discipline more than we often admit. The payoff goes to whoever owns the asset when, and if, value finally arrives.
Second, conviction cannot be borrowed from a friend, a colleague, or a brochure. In late winter the consensus decided AI would replace the cybersecurity industry and hammered its leading stocks. In March, tax-exempt bonds went through a sharp selloff of their own. By July, the story had reversed. AI is now cybersecurity's biggest tailwind, and munis are back in demand after briefly flashing some of their most attractive yields since the financial crisis. The investors who dumped both are clamoring back in at higher prices. Borrowed conviction always gets returned at the worst possible moment. The lot owners learned this a century ago, watching the same tides come over the same seawall. The families who held had no better information than the families who fled. Everyone could see the water. The difference was what the water did to their resolve. The reward went not to the visionary, but to the fools stubborn enough to hold on.
My office is on Marine Avenue. A special thank you to Steve and Steve from the corner of Coral for suggesting this month's story.
Daniel Tyler Holt
Principal | Holt Investment Partners
Disclosures: Holt Investment Partners LLC is a Registered Investment Adviser. Historical material is drawn from the Balboa Island Museum, the Newport Beach Historical Society, Visit Newport Beach, and other publicly available archives, which may differ in detail; a full source list is available upon request. Market commentary is based on publicly available data and published research as of July 2026. The Balboa Brief is for informational purposes only and does not constitute investment, legal, or tax advice, or a recommendation to buy or sell any security or asset class. Views expressed are as of July 2026 and subject to change; forward-looking statements are not guarantees of future results. Investing involves significant risk, including loss of principal. Past performance is no guarantee of future results. Advisory services are offered only pursuant to a written agreement where Holt Investment Partners LLC and its representatives are properly licensed or exempt from licensure.
