In 1944, when the US acquired Water Island for $10,000, they began building a defense installation called Fort Segarra. Plans included barracks, gun emplacements, watchtowers and underground bunkers. It was not finished before World War II ended, but was used for years after as testing grounds for poisonous gases.
From a brochure found at the wreck: “Indulge yourself on one of our Big Party or Romantic Dinner Cruises. You’ll be dazzled by the colors of the setting sun and twinkling lights of Charlotte Amalie harbour. The Amalie Queen is a 90 foot replica of a riverboat and carries up to 160 guests on our twin decks.”
In 1950, the US Department of Defense turned Water Island over to the Department of the Interior, who leased it to Walter Phillips, a private developer, for $3,000 dollars a year. A hotel, the Water Isle Hotel & Beach Club, was built on the island, and operated for over 30 years, when in 1989, Hurricane Hugo severely damaged the hotel and it was abandoned.
