A jackrabbit hunt, a brochure for a hotel that did not exist yet, a lot auction that paid back the whole peninsula in a day, the crash, and the man who ended up owning it. All records sourced and cited.
In December 1885 a few men paid $110,000 for the whole Coronado peninsula, North Island included. Eleven months later they held their first auction of lots on it. Three hundred lots sold that day, for a total of more than $110,000.
The first day of sales paid back the price of the entire peninsula. And there was no hotel. Ground for the Hotel del Coronado was not broken until March 1887, four months after that auction. They sold the lots on the strength of a building nobody had started.
That is not just my read of it. The San Diego Historical Society's own journal said it in 1966. Burke Ormsby wrote that the Del "wasn't built because San Diego needed a hotel." He called it "the biggest, fanciest, gaudiest real estate sign ever conceived."
I sell houses for a living. I have never seen a better listing photo.
What follows is how the sale worked, how it nearly failed, and how John D. Spreckels came out of it owning the hotel after paying $511,050 for one partner's share. There is one more piece of how he got it, and it is saved for the end.
The strip of land between San Diego Bay and the ocean did not have a name worth selling. It was called the Island or Peninsula of San Diego. William Smythe's 1908 history of the city traces the title to Archibald C. Peachy and William H. Aspinwall, who took it from Pedro C. Carrillo on June 11, 1869. It was described then as 4,185.46 acres.
That acreage belongs to the 1869 title. I have not found a source that says how many acres changed hands in 1885, so this page does not give a number for that.
What was on it was brush, sand and jackrabbits. A Los Angeles newspaperman who walked it in 1886 called the spot "uninviting as it is in a state of nature."
Two men went over to the peninsula to hunt rabbits. Ormsby names them as Elisha S. Babcock, a retired railroad executive from Evansville, Indiana, and H. L. Story of the Story and Clark Piano Company in Chicago. He admits nobody knows how the two met or how well they knew each other. Smythe adds that Babcock had come to San Diego in 1884 in search of his health.
Somewhere on that hunt Babcock decided the place was a land promotion. As a railroad man he knew what Western land sales looked like. The transcontinental lines were selling cheap tickets west and wanted the country filled up fast.
On December 19, 1885, by Ormsby's account, Babcock, Story and Jacob Gruendike, president of the First National Bank of San Diego, bought all of Coronado and North Island for $110,000. Smythe lists four buyers: Babcock and Gruendike of San Diego, Joseph Collett of Terre Haute, Indiana, and Hampton L. Story of Chicago. He says they got the entire property from the head of the bay to the mouth of the harbor. Both accounts agree on the price.
The timing was not an accident. Southern California was in its first big real estate boom. Ormsby puts San Diego's population at about 2,400 growing to some 10,000 in a single year. His point about how land got sold in those days is the key to everything that follows. If you wanted to sell empty land, you built a hotel on it, or at least promised one. Hotels went up or were promised in Lakeside, Del Mar and National City too. A big hotel told a buyer back East that the place was real.
Early in 1886 the new company changed the name. The Island or Peninsula of San Diego became Coronado. Smythe says the word means crown.
Early in 1886 Rand McNally printed a 24 page prospectus titled "Coronado Beach. San Diego, California." It announced a parent company with a capital of one million dollars and three subsidiaries: the Coronado Beach and Water Company at $500,000, the San Diego and Coronado Ferry Company at $100,000, and the Coronado Railroad Company at $24,000. Babcock was president, Story vice president, Gruendike a director. Ormsby lists three more Indiana men involved by then: Josephus Collett, Heber Ingle and John Inglehart, the miller who later made Swansdown flour famous.
The prospectus described the hotel in full. Persian rugs, Oriental tapestries, a guest wondering whether he had walked into "a fairy palace." Ormsby's comment on it is the best line in his article. When that brochure was written, the only thing happening on the peninsula was a crew of men burning brush.
The articles of incorporation for the Coronado Beach Company were filed in April 1886, with the million dollars divided into 10,000 shares of $100 each.
In May 1886 H. G. Otis wrote a letter about the place to the Los Angeles Times, and Smythe printed it in full in 1908. It reads like a site visit.
The peninsula had been surveyed and the middle of it platted. A nursery of a hundred thousand plants was going in, and the new streets had tree names like Palm and Date. A street railroad across the peninsula was under way, with one car already on the ground. A telephone line twenty five miles long ran down the peninsula and through National City to the city. A steam ferry was being built in San Francisco.
The hotel, Otis wrote, was promised to be "a grand structure, ahead of anything on the coast," costing as much as $300,000. He put an exclamation point in parentheses after the number. That figure was a promise made before anyone dug a hole. It is not what the hotel cost, and neither source here says what it did cost.
Then Otis said the quiet part out loud. "The plan is to sell residence lots in the tract, and so gather about the hotel and on the beaches a considerable permanent population."
There was one more detail in that letter that I love. Every deed carried a clause that no liquor would ever be sold or drunk on the lot. The hotel kept "a monopoly of the beer business." Otis said the owners had planted themselves on the rock of Prohibition "with a loophole in the hotel to get into."
In July 1886 the company hired W. H. Holabird to run the land sales department. Smythe says he went straight to work on advertising and on preparing an auction.
The buyers would need a way to get there. While the new ferry was being built the company leased a boat called the Benicia. The new ferry, the Coronado, made her first trip on August 19, 1886.
They would also need water. Water was piped under the bay through 3,300 feet of submerged pipe and turned on October 22, 1886. Ormsby says it came from wells in Old Town. That was three weeks before the auction.
Ormsby says more than six thousand people crossed the bay that day, some by skiff, some by launch and the rest on Babcock's ferry.
The first parcel went to a San Diego attorney, Major Levi Chase. Ormsby says he paid $1,600 and, by the reports, was offered $2,000 for it the same day.
Smythe gives the result. Three hundred lots sold for an aggregate of more than $110,000. The price of the whole peninsula, back in one day.
The sales kept going after the auction, with balloon ascensions, a year of free water, and free tickets on the ferry and the street railway. Smythe says private sales often ran $25,000 a day, and one day reached $150,000. Ormsby puts the monthly total at $100,000 to $400,000. By January 1887 there were thirty houses finished or going up, and lot sales were averaging $10,000 a day. One excursion brought ten carloads of buyers from Los Angeles and the East. Smythe puts the grand total of lot sales between $2,200,000 and $2,300,000.
Babcock was sure he had plenty of money coming in to finish his hotel. Ormsby's verdict on that is four words long. "He was almost right."
Late in 1886 Babcock brought in the architect James Reid and his brother Merritt. In a monograph Reid wrote for the hotel's fiftieth anniversary in 1938, he remembered Babcock's instructions as close to these words: build "a house that people will like to come to long after we are gone."
The plan Reid dictated put the whole building around a garden court of tropical trees, with balconies looking down on it from every floor, verandas toward Glorietta Bay, and a dining room angled out toward the ocean.
In March 1887 Mrs. Babcock turned the first shovel of earth. Smythe says the foundations were laid that month.
San Diego had nothing to build it with. Ingle, Reid and Herman Shussler, a San Francisco stockholder, contracted for every board the Dolbeer and Carson Lumber Company cut. The building went up in Douglas fir, sugar pine and redwood. The lumber came down rough and green, so Reid built his own planing mill to finish it, plus a brick kiln, a metal shop and an iron works.
Skilled carpenters were scarce, because in a boom everyone was rich, or in Reid's words would be "tomorrow." Reid hired unskilled workers through the Chinese Seven Companies in San Francisco and trained them on the job. The foundations started on the north side, the simplest part, and worked south.
On December 7, 1887, a special train of two baggage cars, six sleepers and a Pullman pulled in with 324 people. Smythe calls them the first installment of hotel help.
Smythe gives the formal opening as February 14, 1888. Ormsby gives February 1888, with the Crown Room opening on February 19. He says 1,440 people came over from San Diego just to look, and that it took about two more years to finish the whole building.
The Crown Room was Reid's pride. Ormsby says the sugar pine ceiling was fitted with pegs and glue and has no nails in it.
Ormsby also says the Del was the first hotel in the world lit by electricity throughout, that Reid ran the wires inside gas pipes in case the electricity failed, and that Thomas Edison inspected the installation as a guest. Those are his claims in 1966. I have not found a record from the time that confirms them, so they are here as his.
The boom ended. Ormsby's line for it is six words: "You couldn't give real estate away." People were leaving San Diego as fast as they could find the money to go.
The lot money Babcock was counting on to finish the hotel stopped. Ormsby says the owners were getting good press and sitting on a white elephant. Out in Lakeside, another boom hotel ended up burning down on an empty prairie. The Del could have gone the same way. Ormsby calls what it nearly became "the most expensive billboard ever built."
What saved it was John D. Spreckels, already doing business in San Diego. Ormsby calls him the sugar millionaire. Ormsby says that in July 1889 Spreckels bought Story's interest in the hotel for $511,050. Smythe tells it differently, and the difference is laid out at the bottom of this page.
In 1890 Babcock sold his interest in the water company to an English firm, and Ormsby says he spent months defending himself to San Diegans who did not like the foreign buyer. In 1893 Spreckels took over the San Diego street car company. Within about a year he owned the Del outright. Smythe says Spreckels later acquired Babcock's interest too and became the sole owner. What, if anything, Spreckels paid Babcock for it, Ormsby says, is not readily known.
For a while the hotel's own literature listed Spreckels as owner and Babcock as manager. By the early 1900s another man was manager. Babcock left and later practiced law.
The Spreckels family held the hotel until April 1, 1948.
As a hotel, Ormsby says, it was a work of art. As a real estate promotion he calls it "only partially successful."
The lots did sell, and fast, while the boom lasted. Then the bottom fell out, and Smythe says the town of Coronado took longer than San Diego itself to recover from the crash. The hotel outlived the boom it was built to sell. The men who built it to sell lots mostly did not get to keep it.
San Diego was a real estate deal before it was much of anything else, and the Del is the biggest example in the county.
Alonzo Horton bought most of what is now downtown for $265 in 1867, and that story is How San Diego was bought for $265. A San Diego neighborhood cost eighty dollars. A railroad built a wooden bridge from Ocean Beach to Mission Beach to sell lots at the far end. Another railroad planted a eucalyptus forest for lumber and got Rancho Santa Fe instead.
The Del is the same play with a much bigger sign on it.
Babcock did not have the money to finish his hotel. Spreckels lent it to him. Ormsby says it was $100,000, "money that was never repaid."
So the money that finished the Hotel del Coronado came from the man who ended up owning it.
The Del still does the job it was built for. People see the hotel first and the town second. Current numbers for the town are in the Coronado market report.
Spreckels sold his next sandbar without putting his name on it. The walk streets of Mission Beach were laid out as an alphabet in 1914, and the first Court, Aspin, has never been explained.
Who bought it. Ormsby names three buyers, Babcock, Story and Gruendike, and lists Collett with other Indiana men as involved by early 1886. Smythe names four buyers and counts Collett among them. Both say $110,000.
When Spreckels bought Story out, and which Story. Ormsby says July 1889, for $511,050, from H. L. Story. Smythe says July 1887, and calls him W. W. Story. That is two years apart and two different sets of initials, and both sources name the partner as H. L. or Hampton L. Story everywhere else. One of them has an error and I do not know which. For what it is worth, the poem that opens Smythe's chapter is signed W. W. Story.
The opening date. Smythe gives the formal opening as February 14, 1888. Ormsby says the hotel opened in February 1888 and the Crown Room on February 19. Close, not the same.
What the hotel cost. Neither source establishes it. The $300,000 figure is a promise in a May 1886 newspaper letter, written before construction, and it is printed here only as that.
The electric light and Edison. That the Del was the first hotel in the world lit by electricity throughout, and that Edison inspected it, are Ormsby's claims in 1966. I have not checked them against a record from the time.
The crowd. The figure of more than six thousand people at the first auction is Ormsby's. Smythe counts lots and dollars, not people.
What Spreckels paid for the rest. Ormsby says it is not readily known what money changed hands, if any, when Spreckels took full control. Smythe does not say either. This page does not guess.
More San Diego history: every story, oldest history first.