(Note: This history was assembled through the resources provided by Catherine Wilson of the Flagler Beach Historical Museum and comments by the Florida Inland Navigation District, Gail Wadsworth and several old time residents.) 

The Florida Intracoastal Waterway had its beginning more than a century ago as the natural outgrowth of an effort to develop the almost-connected chain of creeks, rivers, lakes and sounds along the Florida east coast into one continuous waterway. The earliest surveys were made in 1844, but nearly forty years passed before construction began. From then until becoming U.S. government property in 1929, the history of the waterway was a continuous fight against vegetation, financing and legislation. 

Actual construction on the first section was begun in 1881 by the Florida Coastline Canal Company. Various problems caused the terms of the original charter to be modified until by 1889 the project was based on a five foot depth and a fifty foot width channel. In 1890 the 18 mile section between the Halifax and Matanzas rivers (mostly through Flagler County) was completed and identified as the East Coast Canal. The route was now open from Jacksonville to New Smyrna. The waterway on the east side of Island Estates is all that remains of the original East Coast Canal, with Island Estates being part of the mainland then. 

Around 1910 several homes were constructed on the west side of the East Coast Canal in the area of Flagler Beach. The community was named Ocean City. The first homes on beach side were completed in 1915. A ferry large enough for two cars provided passage across the waterway. In 1923, the post office was moved to beach side and Ocean City was renamed Flagler Beach. A hand-cranked "Turn-Stile" bridge was opened in 1920, finally being replaced by a drawbridge in 1951. 

During the 1920s five steam-powered paddle boats plied the inland waterway weekly between Jacksonville and Daytona Beach. A sixth boat, the Lusteride, was oil-powered. Once, because of a bad slide, the Lusteride was tied up for several days at a location on the north side of present Island Estates. Mr. Fox, who was manager of one of the dredging companies working the East Coast Canal, tried to dredge through the slide, but found a massive coquina rock formation. Several weeks were needed to blast a route through the rock. The name "Fox's Cut" stuck to that section of the canal. Many locals still refer to the East Coast Canal behind Island Estates as "Fox's Cut." 

At no time through the 1920s did the Canal Company appear to maintain the specified 5x50 foot depth and width. From 1923 to 1927, the company experienced many financial difficulties so that in 1927 the Florida Legislature created the Florida Inland Navigation District. A bond issue provided the financing to buy the old canal and necessary right-of-way, which was all surrendered to the U.S. Government in 1929. The U. S. Corps of Engineers then proceeded steadily towards an initial objective of an 8x100 foot channel. 

Besides widening and deepening, the Corps eliminated sharp turns in the East Coast Canal. The sharpest turn existed behind Island Estates. An aerial view shows an almost 90 degree turn as does a 1926 map of Flagler County. 

The Corps excavated a new channel during the 1931 to 1933 period, bypassing the East Coast Canal on the west and thus carving out what is now known as Island Estates---262 acres in area and 2 ½ miles in length. An engineering map of that project hangs in the Flagler Museum. Folklore has it that Herbert Hoover aboard the Presidential Yacht Sequoia was thrown off his chair as the boat traversed the 90 degree turn behind Island Estates. He was reported to have shouted, "Someone ought to straighten out this damn curve," and that is why we have Island Estates. The truth of the event is open to question, but it makes a good story. 

The 8x100 foot Intracoastal Waterway was completed from the Georgia border to Miami in 1935. Between 1943 and 1965 the waterway was expanded and deepened to 12x125 feet to Ft. Pierce and 10x125 feet to Miami. The Flagler County work was done in 1951. A 1997 Intracoastal Waterway Handbook comments on the remains of the East Coast Canal as follows: "Fox Cut is a fascinating place. The wakes of boats have done their usual erosive damage to the high sand banks of this cut, but in so doing have created attractive miniature mesas, tiered plateaus, grottos arid convoluted pinnacles." 

The newly carved island soon became a dangerous place to visit. Overgrown with vegetation, it was a home for deer, wild hogs and many, many snakes, including large rattlesnakes. The area was known as Snake Island, although ITT documents refer to it as Fish Island---a designation unknown to long time locals. Hunters used to come for the wild hogs and for fun to shoot rattlers. At a couple of spots, it was possible to walk across the East Coast Canal at low tide. The owner of the island, Claude Yarn, had a bridge with a fenced entry built from AlA. The bridge was damaged by fire once and was rebuilt. What remained of the second bridge was used by ITT to construct the present south bridge. No one ever made a permanent residence on the island. 

Present day Island Estates had its beginnings in 1967 with the I1T purchase of Rayonier Corp. and Levitt Corp. Rayonier owned thousands of acres of forests in the Palm Coast area while Levitt had the experience of building large housing tracts. By 1973 additional land was purchased from the Wadsworth and Yarn families of Flagler County. Preliminary layouts of the Hammock Dunes project were made at that time, but no housing development proceeded until the late 1980s. A Sheraton hotel near the site of the Hammock Dunes Club was open from 1979 to 1988. A small ferry operated across the Intracoastal Waterway near the site of the Palm Coast Bridge, with a minibus taking people to the Sheraton and the beach. The Palm Coast Bridge opened in 1988. 

The 200 lot layout of Island Estates was approved by government authorities by early 1989. Construction of several homes began in 1990, and in 1991 several families took residence in Capri Court, the first being Joan and Herb Brattlof. Today, about 95 homes are occupied or under construction. As almost all the lots are sold, residents took over the Island Estates Neighborhood Association from the developer in April, 2003.