Photographer Gwin Hunt is based in Annapolis.

Two years ago, when their real estate agent introduced them to The Terraces, interior designer Patrick Cox and his partner Brandon Pace couldn’t resist its picturesque setting. A two-acre property near Annapolis, the Cape-Cod- style house is perched on a promontory with 270-degree views of the Severn River. Terraces, iron-stone walls and rough-hewn paths meander downhill from the home to the water’s edge. Sailboats glide past on trips to and from the open waters of the Chesapeake Bay just one mile away. “When I was walking down the driveway,” recalls Cox, “I said, ‘I want this house.’ This house is perfectly positioned and it has all these mature trees, which really finish off the property. And the stone walls are really spectacular.”

Built in 1935 by a Baltimore liquor importer as a weekend retreat, the house boasted “good bones,” according to Cox, fine architectural detail—and sweeping river views from practically every room. While  structural changes were unnecessary, Cox and Pace knew that they wanted to put their own imprint on the interiors, which in their eyes were far too traditional and serious for everyday living on the shore. “We’re young,” says Cox, “and the house is all about summertime. This isn’t a place where you’d have Queen Anne and all of that. It doesn’t go with the scenery. We wanted to make it feel livelier and more inviting. It was important to us to respect the historic feel of our home, but at the same time put our own spin on it.”

Cox and his business partner, Pat Bertrand, run Décor Design, an interior-design firm that specializes in decorating waterfront homes; Pace is the company’s business manager. When they began updating what would be home for Cox and Pace and a workplace for all three of them, they faced a challenge familiar to owners of waterfront property: How to reconcile the desire to see the river from every vantage point with the need for functional, aesthetically pleasing interiors. “The big thing we deal with all the time is that clients want to see the TV, the fireplace and the water view with no obstruction. They buy waterfront and spend millions to be there and they want to see it,” says Cox. “We did the same thing we tell all of our clients, which is live in the house a little bit. Look at the sun conditions. Let the house talk to you. Try your furniture set-up a few different ways before you go and have your carpet cut to a particular size.”

Partially blocking a water view, says Bertrand, is also okay. “One of the things we tell our waterfront clients is, ‘The view is always going to be there.’ Sometimes a piece of furniture might take up the view—I wouldn’t recommend putting a solid wood armoire in front of a window, but maybe a table with a lamp or a plant. These things will give your view dimension,” she says.

Applying these principles in designing The Terraces, the trio positioned the most comfortable sofa and chairs in the living room to face the river and a nearby dock. A cozy nook in the sunroom enjoys a water view on all three sides. And the custom-designed partners’ desk in the threesome’s shared office gazes off toward a dreamy horizon.

Once the space-planning was done, the designers set about furnishing the house with what Cox dubs “an eclectic mix of contemporary and traditional.” They carefully edited a mix of antiques and modern furniture, contemporary art, custom wall coverings, fabrics and lighting—and a dose of the unpredictable. For example, in the living room, a couple of original silkscreens by Andy Warhol and antique-painted Vietnamese mirrors hang near an African drum table, while two chic but inexpensive Chinoiserie vases flank a priceless 1918 marble sculpture from Germany. “One of the things we strive for,” says Bertrand, “is little unexpected things that pop in a room.”

The designers also juxtaposed colorful fabrics, textured wall covering and striking artwork against a backdrop of wood floors and  neutral rugs. A case in point is the grass-cloth wallpaper they ordered from Phillip Jeffries Ltd. in a custom shade of lavender for the open living-dining room. After taping some 10 or 20 samples on the wall, they agreed that it was the clear winner, providing just enough texture and contrast to accentuate the room’s original crown molding and wainscoting. Bertrand and Cox then applied shades of lavender throughout all of the rooms on the home’s ground level. In the sunroom, which adjoins the living room, lavender and chartreuse stand out in the custom-colored Manuel Canovas toile drapery. The same fabric was chosen for drapes in the office, but this time, in a more subdued scheme with browns and taupes playing off the lavender.

The one room that received a major overhaul was the kitchen, where an excess of heavy oak cabinetry created a boxed-in feeling. The designers replaced the overhead cabinetry with open shelving hung on a wall of glass tile. They invested in thick marble countertops offset with a comfortable reading chair and a red Jacques Garcia light fixture from Paris. “We wanted to soften the hardness of the kitchen because you have the hard marble and the hard tiles,” says Bertrand. “You can create a mood in the kitchen too.”

Though sophisticated, the home’s interiors are not precious or formal. Cox and Pace host frequent parties—many of their guests often arrive on their boats, which can safely moor at the property’s dock. The couple also insured that the furnishings would be impermeable to the wear-and-tear of children, including their newly adopted baby girl, Isabella, and their pets, Romeo and Paris. “Our spaces tolerate our lifestyle—two dogs, a baby and an active social life with summer parties on our pier,” says Cox. Isn’t that what living on the water is all about?