From Smugglers to Wakeboarders: The History of The Lagoon on Grassy Key

Nestled in the heart of the Florida Keys, The Lagoon on Grassy Key has a rich and colorful history that stretches back to the early 1900s. Located on 50 acres along the Overseas Highway in Marathon, the lagoon at the heart of the property has gone through several transformations, each chapter adding depth to its story and making it a unique gem of the Florida Keys.

The Early Years: Quarry Days and Railroad Legacy

The tale of the lagoon begins with the construction of Henry Flagler’s "Overseas Railroad." In the early 1900s, the East Coast Railway dredged the land. By the 1970s, the lagoon had taken shape as a quarry for limerock, leaving us with almost 5 acres of tidal lagoon with depths reaching as much as 65 feet!

Once environmental regulations began to catch up with development, the harvesting of rock was put on halt. The lagoon sat idle for a decade with the property frequented only by the occasional swimmer, sunbather, nudist, or smuggler. 

Aquaculture Ventures

As a limestone quarry in between the Gulf of Mexico and the Atlantic Ocean, the tide freely flows in and out of the lagoon filtering clean ocean water throughout the day. In the late 80’s, this caught the eye of some aquaculture enthusiasts who turned the lagoon into the Big K Lobster Farm, and eventually another short-lived fish farming endeavor called the Aqua Ranch. Despite a massive investment into both these operations, a significant amount of infrastructure, and a research partnership with the University of Miami, the dreams of sustainable lobster, snapper, and cobia farming faded away with the tides. The property again lay dormant now with rusty bones. The only allure was to the seedier travelers involved in illicit practices such as drug smuggling, squatting, and salvaging scrap metal.  

A New Beginning: Keys Cable Park Takes Shape

In 2011, Matt Sexton partnered with Mike and Shana Walsh of Otherside Boardsports to create Keys Cable Park. Over the years, Sexton spent his time salvaging what he could from the old fish farms. He transformed the original laboratory into a retail shop and employee housing facility. Old lobster cooling refrigerators became a trendy food truck and beer garden, which he named after his four-legged companion, Bongo.

By March 2012, Keys Cable Park officially opened its gates, attracting wakeboarders, kiteboarders, and stand-up paddle boarders to the lagoon. In 2014, the park expanded to open the rest of the accessible property, and along with it came the creation of an eco-farm that would continue to evolve over the years. The mission was simple yet powerful: combine fun, healthy activities with a focus on environmental sustainability and education.

Salvaging the Past: From Ruins to Resources

As Sexton continued to clean decades worth of materials from the properties, he found many underutilized resources that the island provided. He began a large-scale composting operation that helped repurpose local organic matter and storm debris. He then used that material to build multiple gardens around the property and in different locations on Grassy Key. Salvaging old fish farming equipment and marine storage units, he created small marketplaces and attractions around the property for artists and craftsmen to utilize affordable spaces to create the oddities that the Keys have always been known for.

Surviving Hurricane Irma: A Test of Resilience

In 2017, Hurricane Irma struck the middle and lower keys as a catastrophic Category 4 storm. Over 6 feet of water rose out of the lagoon and flushed in from the Atlantic accompanied by 140+ mph winds. The Keys Cable Crew worked tirelessly for a year putting the pieces back together, but without the tourism industry and big hotels providing daily patrons the park was burdened with debt and destruction. Over the last 20 years, the majority of the hotels had been bought out by large corporate interests, who capitalized on the downturn and their insurance settlements to revamp their accommodations. This caused the local economies severe distress as scores of businesses that depended on consistent visitors closed. 

During this post-hurricane slump, Sexton decided to diversify the park's dependency on large corporate interests and founded a small investment group to take over three abandoned mom-and-pop resorts just down the road. In the Spring of 2019, Grassy Flats Resort and Beach Club opened for business. As a waterfront resort, Grassy Flats attracted guests specifically for the enjoyment of board, wind, and paddle sports, utilizing Keys Cable as an ideal training facility to help the experience. The resort also became an attraction for locals, providing a resort-style atmosphere for families to enjoy the pool, bar, and beach as Beach Club Members in their own back yard. The badly damaged resort was opened at half capacity while Sexton planned a large expansion project. The end result would be a world-class sustainable watersports beach resort consisting of 38 diverse guest rooms, 2 pools, a waterfront restaurant, and an extensive garden and landscape program.

COVID-19 and the Future of Keys Cable Park

As the resort project was moving forward, COVID-19 hit, throwing a wrench into the plans. The pandemic led to a temporary shutdown of Keys Cable Park, a loss that occurred during spring break—one of the park's most profitable times. With businesses across the Keys facing similar challenges, Sexton and the Walsh family restructured their operations.

By 2020, Sexton’s investment group took over Grassy Flats Resort, while the Walsh family operated Otherside Boardsports as an affiliate business based in Islamorada. With Sexton continuing to manage Keys Cable Park, the focus shifted to revitalizing the park, including upgrading the ramps and features and improving the amenities around the lagoon. This fresh start offered new hope for the future.

Looking Ahead: A Thriving Destination for All

Today, The Lagoon on Grassy Key stands as a testament to resilience, innovation, and the power of community. The Lagoon is now home to exciting attractions like Keys Cable Park, The Rhum Runner Aqua Park, Bongo's Beer Garden, and Saloon Surf Shoppe, offering a fun-filled experience for visitors of all ages.

Once a site of quarries, aquaculture, and even illicit activities, it has transformed into a vibrant gathering place where people can enjoy thrilling watersports, relax at the beer garden, shop for watersports gear and local goods, or splash around in the aqua park. This unique blend of adventure and relaxation ensures that there’s something for everyone at The Lagoon. As this beautiful space continues to grow, it remains a shining example of how community, creativity, and environmental stewardship can come together to create a lasting legacy for generations to come.