Little extra detail on how it came to be post the war:
In 1950 the Department of Defense turned Water Island over to the Department of the Interior who then leased it to a private developer by the name of Walter Phillips. The annual rent for the island was $3,000 dollars. The lease was for 20 years and the developer constructed a hotel and homes. Walter Phillips sold the master lease for Water Island in December 1965 to the Water Isle Hotel & Beach Club under the ownership of Edward McArdle. McArdle expanded the hotel and built/sold some private homes. The lease was renewed in 1972 for another 20 years. In 1989 Hurricane Hugo severely damaged the hotel and it subsequently closed. The lease ran out three years later and was not renewed.
Water Island was transferred by the federal government to the USVI territorial government on December 12th, 1996; making Water Island the 4th member of the US Virgin Islands. Residents living on Water Island during the transfer were allowed to purchase the land and homes that they occupied.
Today Water Island exists as a somewhat private island to its 161 residents (2000 Census). The island remains largely un-commercialized and is maintained by members of the Water Island Civic Association and residents along with intermittent assistance from the Virgin Islands’ government.
For those of you looking to visit Water Island, you have two options: private boat or ferry. The good thing about taking a private boat is that you can visit at your leisure. Oh and you don’t need a passport to visit Water Island, so it’s great for those of you looking to get on the water but stay in US waters.>>10412172
And this gem of a link:
http://www.waterislandhistory.com/indexpage.html