Mud Flats Grow Up to Be Posh Islands : Newport Harbor: Imagination of early developers culminates in creation of eight residential islands.

As a little girl, Diane Beardslee frequently played on a little sand spit called Shark Island in Newport Harbor while her parents fished nearby. How could she have known as she collected shells that many years later she and her husband, Randy, would buy a home on what would later be known as Linda Isle, where their two sons would play and have friends.

“Randy and I and the children had lived in Palos Verdes, where we both teach at Palos Verdes High School,” said Diane Beardslee, “and we had our boat at the Wilmington marina. We decided we wanted a house with its own marina. After looking at what was available on the water and on the (Balboa) peninsula, we decided Linda Isle was perfect for us.”

The 20-year-old home that the Beardslees purchased in 1986 for just over $1 million is about 4,000 square feet and has five bedrooms, a formal dining room, a large family room they use as a TV room and library, maid’s quarters, and a temperature-controlled wine room that holds 700 bottles. There is also the pier where they now have their 51-foot ketch.

They were concerned about whether there would be other children on the island for the boys to enjoy.

“There are probably five times as many children on Linda Isle as we had in the neighborhood in Palos Verdes,” said Randy Beardslee.

Linda Isle is one of eight residential islands within the long arm of the Balboa Peninsula and the shore of mainland Newport Beach in Orange County. All are incorporated in the city, and each is unique in form, history and today’s lifestyle.

They are in what used to be a three-mile stretch of mud flats south of Pacific Coast Highway and between Newport Boulevard and MacArthur Boulevard, which are accessed by the Costa Mesa (55) Freeway, and run in a southerly direction. Four of the islands (Bay, Linda, Harbor and Collins) are private and gated.

In the beginning there was just one.

Bay Island is a natural island and even that was added onto at one time to create room for the 23 homes that are a corporation. Each owner owns shares. A windmill had been erected and houses in the pagoda style began to appear as early as 1905, when R. J. Waters and Rufus Sanborn purchased this small spot of land for $350 and organized the Bay Island Club.

The most familiar islands are Balboa and Lido. Being the largest to be envisioned by early day entrepreneurs, they also share a checkered history, as does Collins, the smallest island with just eight homes.

It was in 1889 when brothers James, Robert and John McFadden, who owned a lumber business, purchased from the state about 1,000 acres for $1 each that included almost half the existing peninsula as well as swamp and overflow land in the harbor.

When the McFaddens withdrew from Newport Beach soon after 1898, they sold 500 acres that included a major part of the undeveloped swampland for a reputed $35,000 to W. S. Collins (who came originally from Indiana). Collins operated under the name Newport Beach Co., and in 1904, railroad magnate Henry E. Huntington bought a half-interest in his holdings.

When problems in the partnership developed, Huntington took an active interest in the company and became owner of a part of the peninsula and the Lido Isle Development. (Huntington, who was a nephew of Collis P. Huntington of the Southern Pacific Railroad, also brought the “red cars” to Newport Beach.)

In 1906 a dredge was moved onto the mud flat at the east end of the harbor, and Collins began raising the area to a few feet above high tide level, adding bulkheads around the fill. It would become Balboa Island.

Collins began an advertising campaign offering improved lots and promising ferry service. The problem was that the island was submerged at high tide, except for a few high ridges. By 1914 at least 700 lots had been sold. However, promised improvements were not forthcoming. High tides overflowed the island on several occasions. Property values dropped.

When in 1916 the island was annexed to the city of Newport Beach, there were ill feelings between the islanders and people on the peninsula, which the mayor conveyed. “The Island is a dump. It was sold by a lot of damn crooks to a lot of damn fools.”

Collins had staked out for himself the west end of Balboa Island, the only part not submerged at high tide. He dredged a channel surrounding the mud flat, thus creating Collins Island on which in 1908 he built a two-story home that became known as “Collins Castle.” At the east point he created yet another small island dubbed Little Balboa, and it was separated from the larger island in 1913 by the Grand Canal.

Meanwhile, Pacific Electric Land Co. (Pacific Electric Trolley Car Co.) gained title to the submerged island that would become Lido Island, and it’s claimed it was thrown in as an exchange when Pacific Electric brought in a rail line.

In 1923 it was sold to oilman W. K. Parkinson for $45,000. Dredging began and the island was filled to a height of 11 feet above mean low tide. In 1928 a bridge was constructed connecting the isle with the mainland. Inside lots were offered for $450 and bay lots from $1,000 to $1,200.

Harbor Island, a triangular piece of sand, was purchased from the McFadden brothers in the early 1900s by Wayne Goble, a Santa Ana Register reporter. It changed hands twice, with Joseph Beek, who dredged and filled the island, becoming owner for $53,000 in 1925.

One drawback to lot sales during all these years had been bay development. In 1933 a bond issue was approved, and along with a Works Progress Administration (WPA) grant, there were funds for work extending the jetties and dredging of the entire lower bay. The most westerly island, Newport, where there are now 115 homes, was built up to 11 feet above high tide.

Shark Island (renamed Linda Isle in 1949) was owned by the Irvine Co., and James Irvine took an active role in harbor development. It was during dredging in 1933-36 that the island was formed in the shape of a horseshoe so every property would have its own dock and pier.

And then there were eight.

Marge Lindahl has lived on Little Balboa most of her life. Her parents, Oscar and Violet Gibbs, purchased a lot in 1931 for $250 and built a small cottage. They continued to live in Los Angeles until 1940, when they added another bedroom and bath and moved with their two daughters to become full-time residents. The 1,600-square-foot home, which faces the Grand Canal, has remained in the family and now belongs to Marge Lindahl and her husband, Ken.

While the Lindahls are not boaters, she said they enjoy living on the waterfront. “I have been a shell collector all my life, and I still look for shells. We also swim in the Grand Canal when the water is warm enough.”

When Ken Lindahl retired from Xerox, inspired because of her vast collection of shells, they opened the Golden Shell, a gift shop on Balboa Island--the only island with a business district--and a short walk over the bridge from their home on Little Balboa.

There are 2,226 dwellings on these two (Balboa) islands, including homes and duplexes, according to Velma Timmons, a realtor with the Newport Beach office of Coldwell Banker. Prices range from $500,000 for an older inside home, topping off at a $3.795 million current listing.

“On Collins Island, there was a home on the market for $3,450,000. A home just sold on Bay Island that had been listed for $2 million,” said Timmons, pointing out that this is still a private island and a buyer is buying into a co-op and it is a stock transaction.

Bill Grundy, of Bill Grundy Realtors, has been selling real estate on the islands for 28 years and has owned three homes on Lido Island. He said that lots on Harbor Island start at $2 million and can go up to $5 million. Houses are priced from $3 million on up with the highest listed at $10.9 million. The pier and boat slip with this 7,000-square-foot home will take a 100-foot yacht.

On Linda Isle, there are some properties where the land is leased and the homeowner owns the house only. This is called a leasehold.

“There are probably 12 or 13 lots that are leaseholds out of the 107 on Linda Isle,” Grundy said. “The Irvine Co. still owns those lots, and to buy one would be basically $1 million, up depending on the location.”

Prices are a bit more affordable on other islands. On Newport Island, for example, one can find a house of about 2,200 square feet for $675,000, with top prices there at $1.7 million. On Lido Isle a home on an inside street location would sell in the $600,000 range, while a home on the bay would be in the millions.

Lido was the island chosen by Marilyn and Butch Pope in 1991 when they moved from Laguna Hills. Butch Pope had grown up in Newport Beach, so coming to Lido was like going home, and the family, which includes Chris, 10, and Laura, 8, all enjoy the many amenities offered on Lido.

“The children are in the sailing program, and we have a small motorboat and a Sabot (a small sailboat), which we keep in the boat garden. The women’s club has holiday parties and other gatherings. There is a real strong feeling of community. And there are quite a few stay-at-home moms like me with young children.”

Marilyn Pope said they paid in the high $600,000s for the 2,500-square-foot, four-bedroom home. “We have lots of windows, but still a feeling of privacy,” she said.

“Lido Isle is one of the best-kept secrets. It’s amazing how many people here are second generation--who grew up, married and set a goal to come back to raise their children.” Each island seems to have been a participant in one way or another in developing history. In 1909, a celebrated Polish Shakespearean actress, Madame Helena Modjeska, died in her home at No. 3 Bay Island, and in 1912 the movie industry discovered the bay, and countless films were made on the sand and mud flats.

Little Balboa Island in 1918 was the summer location of the Masonic Home tent camp and 52 children and seven adults enjoyed that first summer. In 1938, Jascha Heifetz, world renowned violinist, built a summer home at the west end of Harbor Island. Collins Castle in the 1930s was owned by actor James Cagney, and was leased to the U.S. Coast Guard during World War II. The castle was replaced by eight homes in 1953.

In 1954, Linda Isle became the last to be incorporated into the city of Newport Beach, and it was in this period that the entire city including the islands began to change from a resort to a residential community, with the exception of Balboa Island. It became the place to be for Bal Week, the annual spring getaway when thousands of high school and college students visited Newport Beach and Balboa Island.

During the winter months students from UCI rent the many small cottages and duplexes on Balboa Island, while vacationers move in for summer.

While there are homes on all the islands used as second or vacation homes, there is a population of 5,959 who live in primary homes, and they are in safe communities, according to Sgt. Andy Gonis, public information officer with the Newport Beach Police Department.

“We’re not crime-free, but we have minimal crime. On the gated islands we have less crime than in the rest of the city. We do not have any resident gangs. We do have gang members who come to enjoy the beach and who cause problems, but gang territory is nonexistent in Newport Beach.”

Bond is a La Habra Heights free-lance writer.