How About an Atoll to Go With That?

For many people, the word “paradise” conjures up images of turquoise lagoons and white, sandy beaches fringed by coconut palms.

For real estate investors, paradise could be a place where there are no property taxes and no zoning regulations.

An uninhabited tropical atoll in the Pacific Ocean matches both visions. Privately owned Palmyra, 960 miles south of Honolulu, was recently listed with Phoenix-based Terra Marketing Inc. for $47 million.

“It’s unique,” says Peter Savio, president of Savio Realty Ltd., the local broker. “There’s nothing like it in the world.”

The lush, 600-acre atoll, halfway between Hawaii and American Samoa, could be the ultimate corporate retreat. The nearest humans live 120 miles away, on Christmas Island, also part of the Line Islands.

Other development possibilities include a casino resort, commercial/sport fishing base, ecotourism destination or cruise line harbor, thanks to its large deep-water port. The atoll’s crystal-clear lagoons teem with tropical fish and turtles. Exotic seabirds and crabs are plentiful. Unlike most atolls, which receive too little rainfall to sustain human life, Palmyra is a virtual rain forest.

For the investor, Palmyra offers the rare advantage of no zoning regulations, property taxes or state or local taxes. Because it is a U.S. territory and not part of any state, it is subject only to oversight by the Interior Department.

The Fullard-Leo family of Honolulu bought Palmyra in 1922 with plans to establish a copra (dried coconut meat) plantation. A series of development proposals foundered, largely for lack of resources. Now the three brothers who inherited the atoll--Leslie, Dudley and Ainsley Fullard-Leo--are getting on in years and want to sell it.

Last year, New York investment firm KVR Inc. made moves toward buying it, reportedly for use as a nuclear waste storage site. But Hawaii’s congressional delegation hastily introduced legislation to block such use, and the plan fell through.

Palmyra’s 6,000-foot coral-packed runway was restored to working condition in January, making the site more marketable. Douglas Pothul, Terra’s regional director in Honolulu, said the sellers recently received a cash offer that is under review.