Fantasy Island

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David Schnittlich spends most of his nights mingling with customers at Mango's Seaside Grill, the open-air beachside restaurant he owns in Anguilla. The 65-year-old New Jersey native is one of those rare people who lives out a lifelong dream. Schnittlich says since moving to the island 13 years ago, he has also shed 50 pounds and overcome diabetes, gout and stress. "I'm sure I'll live longer," he says.

While tens of thousands of Americans with warm-weather fantasies migrate to Florida and Arizona every year, a number opt for exotic destinations. Like Schnittlich, many buy businesses for fun and profit once they arrive and are glad they did. Except that it's not all fun.

Along the way, Schnittlich has lived through traumatic changes to his personal life, severed decades-long financial ties and weathered the worst Mother Nature could throw at him. The Northeasterner was drawn to Anguilla by the idyllic tropical scenery, English-speaking population, safety and laid-back atmosphere.

The 16-by-3-mile British Overseas Territory is home to 12,000 people and an intimate getaway for the rich and famous. Its airport's only direct flights are to other Caribbean islands, and no cruise ships make port calls. Most visitors either fly in with their own planes or take a 20-minute ferry ride from nearby St. Martin.

Despite, or because of, its difficulty of access, Anguilla has more than its share of the Caribbean's five-star resorts-including the Malliouhana, Cap Juluca and CuisinArt. It also has pristine beaches and gourmet restaurants. Several resorts are under construction, but the island remains largely undeveloped. The only traffic jams are caused by wandering goats.

Schnittlich saw Anguilla featured in 1989 on TV's Lifestyles of the Rich and Famous. The following day he booked a trip with his wife, Carol. Five years and several visits later Schnittlich liquidated Philmour's, an upscale clothing store in northern New Jersey that his father had opened in 1947, and spent a month traveling the Caribbean while considering a move there.

One evening he was sitting in Mango's, his favorite Anguillan restaurant, when the chef mentioned he was trying to sell the place and move to the U.S. so he could be near his daughter while she attended school. "I realized it was the opportunity of a lifetime," Schnittlich says. "I couldn't just retire and live down here. I needed something to do."

The next day Schnittlich handed the owner a nonrefundable deposit for $50,000, a fifth of the asking price. They sealed the deal with a handshake. Then came the hard part.

After returning to New Jersey, Schnittlich took three weeks to summon the courage to tell his wife about his decision to become an Anguillan restaurateur. "She laughed, but not for long," he recalls. "She thought it was a stupid idea and said I was going through male menopause. She told me to get therapy."

Undeterred, Schnittlich arranged for the previous owner to run Mango's for three months so he could sell off most of his U.S. assets. Schnittlich sold his four-bedroom home in East Hampton, cars and several rental properties in the Hamptons. He kept one for home visits.

Schnittlich's partner bought his 50% stake in Goldberg's, a 14-store New Jersey bagel chain. In late June 1995 Schnittlich paid the balance of the restaurant tab. His $250,000 bought him a wobbly structure with 13 dining tables and cooking gear. Its best asset was the name Mango's Seaside Grill, one of Anguilla's best-known eateries. Schnittlich sank another $75,000 into new furniture, lighting and flooring.

Eleven days shy of Mango's scheduled reopening, he was in the U.S. on personal business on Sept. 5, 1995, when he heard that a giant storm was barreling down on the Leeward Islands. Hurricane Louis was a category five monster with 180mph winds and 25-foot waves. Two days later Schnittlich chartered a small plane to Anguilla. Mango's was in ruins. "The only thing left was the toilet," says Schnittlich, who cried for hours on the beach. It took the island weeks to restore water, power and phone service.

He still chokes up at the memory, but Schnittlich now sees the experience as a blessing in disguise. He'd had the foresight to buy property insurance, and he used it to build a more modern Mango's, with 36 tables. Schnittlich also expanded his menu and his wine list, from 24 to 550 vintages.

Reopened in January 1996, the restaurant quickly recaptured its buzz. Five years into their Anguillan adventure, Schnittlich's wife of 22 years returned to the U.S. and later filed for divorce."My dream came true, but it became her nightmare," he recalls. Tough as the breakup was, Schnittlich says it didn't make sense for either his wife or him to remain perpetually unhappy.

Today he is in love with running a restaurant that draws glitterati like Robert De Niro, Al Gore and the Clintons, who welcomed in 2007 there by dancing late into the night. Although Schnittlich had acted quickly when he heard Mango's was on the market, it had two ingredients his business experience told him were key: an established clientele and a solid reputation. Nor did it hurt that expenses are reasonable.

Schnittlich, who owns his building, pays $78,000 annually for the beachfront acre on which it sits, plus $13,000 for insurance. Schnittlich's biggest headache is labor. When some employees called in sick early on, he got stuck serving meals and clearing tables himself. These days he pads his shifts with 20% extra workers to avoid having to pitch in. He's also managed to lure and keep a talented chef who graduated from the Johnson & Wales' College of Culinary Arts in Providence, R.I., by offering him 20% of the restaurant.

More than anything, Schnittlich attributes Mango's success to keeping things local. "If we don't catch it, we don't serve it," he says. That may be true of the fish, but he still has to import wine, dry goods and meat from Miami. Mango's revenues have increased from $350,000 to $1.5 million a year under Schnittlich, and it's solidly profitable. He closes the business and visits the U.S. between July and September-hurricane season.

Schnittlich is still a U.S. citizen, which means that, even though Anguilla has no income tax, he's on the hook to Uncle Sam. That includes paying the U.S. self-employment tax-15.3% on his first $102,000 and 2.9% above that. There are some tax benefits for Americans living overseas. Nonresidents get to exclude up to $87,600 of income earned outside of the U.S., if they spend at least 330 days every 12 months abroad. Schnittlich doesn't qualify. "Islands are nice, but the cost of living may be higher than you expect," warns Leonard Levin, head of the international tax practice at New York City accounting firm Weiser LLP. "Do your homework," he says, "before you go."

Mere details in the greater scheme of things, insists Schnittlich, who is now known locally as Mango Dave. "I'm a better person now than I used to be, inside and outside," he says. "I used to work 20 hours a day running multiple businesses in New Jersey. Now I only work 4 hours a day."


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