Pirate Cove is actually the backyard of Jonathan Holmes' home in Boston. It is the location where Jonathan will place Jim Sterling's rotting corpse upon his death to allow his children to have a fun place to play pirates.
According to the pact, Jonathan will be required to fetch Jim's body at the time of his death from his home in Mississippi, and then cart the body in his car all the way back to Boston. The body must be placed in the passenger seat and treated as if he is still the living Jim Sterling. The corpse will be buckled in and turned to face Jonathan at all times. Jonathan must endure the various gaseous vapors emanating from the body's decomposition.
Once the pair have arrived in Boston, Jim's body will then be sat in a chair in the back of Jonathan's backyard, and allowed to bleach in the sun.