by Paul R. Spitzzeri
With the end of 1888 and the end of Los Angeles’ second boom devolving into the inevitable bust, one of the many regional real estate projects, and one with remarkable ambition, to flounder amid the turbulent transition was the Main and Tenth Street Hotel, also known as the Hotel Splendid. This effort, undertaken by a joint stock company, but principally led by Andrew H. Denker, an experienced hotelier, as well as rancher, with partner Henry Hammel, was to produce a hostelry covering a city block and containing 680 rooms—a size and scale previously unheard of in the Angel City.
As we saw in part five, however, conditions by summer 1888 were such that, despite public assurances and claims of materials shortages to the contrary, the endeavor descended into serious financial trouble. By the end of that year, rumors were floated of a potential sale to the owners of the Atchison, Topeka and Santa Fe Railway and, not far into 1889, another potential purchaser was mentioned in the Los Angeles Times of 23 January, in which it was reported that a syndicate from Philadelphia, which had a representative in town, received from the hotel company’s stockholders “a proposition to cede their property” with those owning shares encouraged to ratify the offer.
In its 25 March number, the paper printed a report from “M.T.S.” about an unnamed citizen of prominence whose daily rides on the Main Street horse-drawn streetcar and conversations with other riders about the suspension of work on the hotel were such that the “super-sensitive citizen now wore habitually a wild haunted expression of countenance” and abhorred interactions with his fellow riders. One day, when the horse stopped working and the car remained at a standstill, a passenger mused about how much money was lost on the hotel project and what the property’s future use would be. The piece concluded,
Horrors! The citizen’s eyes started from their sockets, and he fairly foamed at the mouth as he sprang to his feet and shouted, “Use? Did you say use? Why they’re going to use it for a first-class lunatic asylum, and I’m going to be the inaugural victim. Ha! ha!” He then bounded from the car, kicked the balky horse with great violence and fell in a fit.
Assuming the tale to be true, it could easily have served as an object lesson regarding booms and busts and what happened psychologically to many a doomed investor in a project like that of the hotel. While the Philadelphia proposition proved to be a chimera, the Los Angeles Tribune of 21 April claimed that “at last it is authoritatively stated that George M. Pullman,” the rail car tycoon, “of Chicago, will take charge of the Tenth street hotel project and push it to an early completion.” It was added that the name “Hotel Pullman” resonated with the potential of success.
On the last day of May, however, the Times informed its readers that,
It was believed up to yesterday that everything was all right [concerning the likelihood of the hotel being built], but, in the language of the Yankee trader, “the deal is off,” and the Times is able to state positively that the great Tenth-street Hotel will never be built.
The reason was that stockholders finally acknowledged that the funds needed to continue with the project were not available, even as there was $100,000 in material on site on top of the $130,000 expended for the completed foundation, but these constituted about a third of the total cost needed to finish the edifice.
Moreover, the paper reported that “Mr. Denker, who owns a little over one-half of the entire stock, made a standing offer several months ago to donate to any person or persons the whole of his stock, if the person or persons would complete the building.” As for stockholders, it was remarked that the next meeting would lead to a subdivision of the tract into 20-foot wide lots distributed by how much stock each owned. Creating nearly 50 lots, including the finished foundation, would yield some $300,000 so that, even with the failed hostelry, it “will be a money-making arrangement.”
The Tribune of 23 July, however, remarked that there was a change in the forecast and that “it gives every citizen of Los Angeles great pleasure to learn that the promoters of the great enterprise out on Tenth and Main streets have at last successfully devised a plan for the completion of the great hotel.”
It was added that “a few weeks ago we all gave up in despair” but “clear heads and wise counsels prevailed” and it asserted that conditions were such that “it is safe to say work will commence in the immediate future.” The paper commented that “this is glorious news for Los Angeles” as “the great hotel is necessary to our prosperity” along with the completion of a cable railroad to Boyle Heights, which happened in August, and the building of an outfall sewer, this latter taking many more years.
The same day’s edition of the Herald went into detail about the new plan, which involved issuing 500 20-year bonds at $1,000 each, and payable with 6% interest guaranteed for the first five years through the issuance of 500 bonds at $300 each, with the half-million dollars believed to be sufficient for getting the hotel completed.
It was intended to send out 100 solicitors to get subscriptions for these bonds and it was mentioned that “the gentlemen who are moving in this direction are sanguine that their efforts will be crowned with success,” while there were apparent expressions of support that “it will certainly be a great thing for the city to get this fine hotel set on its feet.”
Also of note was the listing of the many dozens of stockholders and the amount of assessments paid, headed by Hammel and Denker at $111,250, while the next largest amount was $9,000 from Ozro W. Childs, a director in the company, and a few others who paid between $1,000 and $5,000, while the majority were in the low hundreds. There were also amounts paid above the required assessments, including small amounts from Moses L. Wicks ($200) and Abram E. Pomeroy ($125), while Hammel and Denker collectively sent more than $23,000. Clearly, the partners bore, by far, the most financial risk in the project.
In its editorial on the new development, the Times remarked,
What is now asked for is certainly very reasonable, and if our moneyed people really desire to see this great hotel completed, they should not delay, but “chip in,” according to the size of their respective bank accounts. There is no doubt whatever that a large, first-class hotel does much to advertise and draw tourist travel to a place . . . Los Angeles being a city that is so well calculated to attract and hold tourist travel from all parts of the world, we are especially interested in having a fine caravansary, to invite our guests to . . . The originators of the scheme are in a hole; the building is in a hole, and the question is: How is work to be resumed?
It was remarked that “wealthy travelers are now connoisseurs in hotels” and the state of the industry was far different than it was in, say, 1870, which was certainly true in terms of Hammel and Denker’s experiences in Los Angeles hotels from the Bella Union to the Cosmopolitan to the United States. As for the name “Hotel Splendid,” the Times called it “silly” and opined that
With such a wealth of resonant Castilian [Spanish] names, associated with the historical, geographical, or botanical features of this beautiful land, it would be a wanton and unpardonable prostitution of verbiage to inflict upon the chief architectural pile of the city a name which finds its parallel in thousands of little ‘dobe [adobe] or lumber “Grand,” “Palace” or “Cosmopolitan” hashhouses . . . For goodness gracious sake, don’t hoodoo the big hotel, at the start, by giving it a name that a school-girl applies to her chewing-gum.
What ensued was, among several newspapers, an avalanche of reader-suggested monikers for the edifice, with a selection including: The Palms; Semi-Tropic; Summerland; The Non-Pareil; The Rockingham; Ne Plus Ultra; The Toltec; The Orizaba; Del Sur; Alcazar; Buckingham; Universal; La Habra; Palacio del Sur; La Reina de la Ciudad; Yang Na [the indigenous village in Los Angeles before European colonization]; Angeleno; Buenos Ayres; San Gabriel; San Fernando and any number of surnames such as Alvarado, Requena, Mascarel; Verdugo; Sepulveda; Dominguez; and Yorba. One wag recommended the White Elephant.
The last half of the year offered little in terms of action regarding the hotel including the bond proposal. The 2 November issue of the Herald included an interview with Isaias W. Hellman, Los Angeles’ leading banker and who was part of the project’s leadership, but he told the paper,
I told Hammel & Denker, when they projected their Tenth-street hotel, that what they ought to do was to erect a smaller hotel, which would furnish a couple hundred perfectly appointed rooms, with lawns, flowers and shrubbery, as accompaniments [such as in Switzerland] . . . In the United States, especially on the Pacific Coast, we erect colossal hotels, and if they are only full for two or three months in the year they lose money . . . What we need in Los Angeles is about a dozen first-class hotels of 200 rooms each, and not more.
As the Eighties came to a close, there were a few references to the dormant hotel endeavor during 1890. The Los Angeles Express of 9 May remarked that “the Tenth-street Hotel has been revived” and that Denker maintained high hopes that an unnamed Chicago architect who was sent by capitalists there and was said to have “stated that upon certain conditions he believes the money” to finish the edifice could be arranged. Also deemed important was a guaranteed rent over a period of years so that Windy City capitalists could form a hotel management firm and that this would help secure the necessary funding.
On the opposite end of the speculative spectrum was a letter to the Times of the 14th from “Santa Monica” who informed the paper that a young person’s “idea was to convert the substantial cellarage into swimming baths, forming a grand natatorium at a comparatively small outlay.” With just “a slight structure” as an addition, a bowling alley, cigar stand, dancehall, gymnasium and restaurant could be included and “a grand place of amusement” be “a comfort to Angeleños and a profitable scheme for the stockholders.
Three days later, the publication Los Angeles Life offered a critique of the hotel, observing that “when finished on those plans [laid out by its promoters] it would be a metropolitan hotel in a suburban city” and “entirely unsuited to the tourist class for a lengthy stay.” Somewhat evoking Hellman’s thoughts, the editorial noted that “the most attractive features of an hotel in Los Angeles” would include “an elevated location with ample grounds, porches, tennis courts, bowling alleys, etc.,” not a structure with “not a foot of grass to tread on in this land of almost universal summer.” It concluded,
Mr. Denker is certainly acting with the best of motives, but he is mistaken in thinking that the Tenth street hotel will fit the bill. We have heard the opinions of too many eastern people of the class the hotel is intended to attract and retain, to agree with Mr. Denker. But let an hotel be built by all means, and a suitable one, without delay.
Legal problems continued, as well, when, in July, a judge ruled for a group seeking more than $20,000 in damages in a breach of contract suit with the hotel company denying that its president, Denker, had the authority to execute the agreement. The magistrate, moreover, found it entirely untenable that others in the firm were not aware of his contract as was claimed, saying that such ignorance “would be the greatest negligence on their part.”
On 3 September, Hammel died at age 56 and, while he was remembered for his early hotel work, interest in grape-raising, championing Westlake Park while serving on the City Council and other aspects, nothing was said with respect to the Main and Tenth Street Hotel or his ownership and efforts at Rancho Rodeo de las Aguas.
With the dawn of the Nineties came a report in the Herald of 8 January 1891 that Denker was in communication with Chicago hotelier John O. Plank, who purportedly offered the view that the hotel “could be made a very successful affair if properly undertaken.” This led the paper to remark that “it would be a great thing for this city to get the hotel up in proper shape.”
Just over a month later, however, the 14 February issue of the Express reported that the hotel was sold to the main creditor in that aforementioned suit, Oscar Lewis, a San Francisco ironworks owner, for $20,000, a couple thousand dollars less than the judgment, which comprised material and labor provided for the structure. Lewis told a reporter from the paper “that he only bought the property to protect himself—in other words, to get his money out of it.”
The Times of 26 July reported that W.W. Douglass of Illinois was expected to build a fruit-drying plant on the site, though that deal appears to have fallen through. Just over a month later, the Express of 28 August remarked that the estate of Ozro W. Childs, one of the original members of the hotel company and who died in January 1890, paid just over $26,000 to Lewis for the property. Specifically, the buyer was widow Emeline (neé Huber) and the account noted that “the money paid by Mrs. Childs cleared away the interests of the other stockholders of the enterprise so that it now belongs entirely to the Childs estate.” Moreover, “it is understood she will continue the erection of the building according to the original designs.”
The Herald of 8 September commented that Childs estate manager, Henry G. Finney, was readying to have contracts signed and informed the paper that “Mrs. Childs had only the hotel project in view when she purchased the property, and intends that the original plans, in all their magnificence and extent shall be adhered to.” Moreover, Plank was reported to be on a train with an architect to Los Angeles with the hope that he would strike a deal, but that “there are now in this city representatives of other wealthy hotel men who are ready to negotiate.”
The only major report of 1892 was in the Express of 16 January, which told readers that Chicago hotelier Warren F. Leland “had again opened up negotiations for the purchase” of the hotel property, working with Frank W. Sabichi, of another prominent Angel City family, with the conclusion that Sabichi’s son felt that “the deal would eventually be carried through.” This, too, however, was another failed attempt.
On 13 November, Denker died at age 52 and his obituary did note that he was the central figure in the hotel project, referred to by the Times as a “hobby” while the Express commented that he “always clung to the belief that the building would be finished.” Several months later, in its 8 March 1893 edition, the Express observed that,
The great Main and Tenth street hotel, one of the pet projects of the palmiest days of the boom, may yet become a reality, and that at no very distant date . . . The ever-increasing tourist travel and the specially great rush this winter has made it evident that it can be made a paying proposition. The EXPRESS was told today on perfectly reliable authority that a resident of ample means in this city took an option on the hotel site . . . Several other capitalists are connected with him in the contemplation of purchase of the site and the erection of a grand hotel. They are all men who never do anything by halves, and if the deal goes through a palatial caravansary will go up . . . that will cost at least a million dollars and become as famous as the Angel City herself.
Yet again, nothing developed from this report, while it was learned less than two weeks later that the edifice’s architect, Samuel J.F. Thayer committed suicide due to ill health and financial issues. In fact, the Panic of 1893 soon burst forth and very likely crimped any plans for a revival of the hotel project, while the Los Angeles Pressed Brick and Terra Cotta Company prevailed in a suit against the hotel company when only 31,000 of the half-million bricks were taken. Once gain, the Main and Tenth officials claimed Denker contracted with the brick company without authorization, but a judgment for nearly $2,500 was entered for the plaintiff.
In its 1 August number, however, the Express reported on still another revival with the hotel, deemed to be “in a more formidable and definite shape than it has assumed during the five or more long years that its vast foundation as stood awaiting a superstructure.” Local architects Charles L. Strange and Edwin P. Carnicle, best known for their design of Pasadena’s landmark Hotel Green, drew up plans that were sent to Chicago for review for a five-story edifice to cost $1.2 million, though the article stated the number of rooms was to be 1,800, clearly a misprint.
As before, the paper heralded the news, considered reliable, especially given the current climate:
If Los Angeles should be so fortunate as to get this immense investment right in the midst of or on the heels of the stringent times, it would speak louder than any other one thing in the world at large of the abiding faith there is in the future of this city and vicinity. This faith is already abundantly exhibited in the condition of real estate and building, but this enterprise, added to the fact that there have been no business failures during the raging of the bank run fever would give us prestige for prosperity unequaled anywhere in the country.
Alas, the Times of the 27th noted that, once news of the Chicago syndicate’s investigations and hiring of the architects were publicized, the capitalists “found it impossible to obtain at a reasonable price adjacent grounds for park purposes as they wished” so “they have, in a measure, abandoned the enterprise, or at least are waiting to see whether owners of neighboring property will become more reasonable.”
It would be more than a half-year before the hotel project once again made news of significance, so we’ll soon return with part seven to carry this story forward.
I was very impressed by Isaias Hellman’s advice cited in this post regarding Denker’s unfinished grand hotel. Hellman argued that building several smaller hotels of about 200 rooms each was wiser than constructing a single massive 700-room hotel.
As a banker rather than a booster or opportunist like Denker, Hellman’s thinking was rooted with financial capacity, risk management, and portfolio investment, rather than optimistic aspiration and bold speculation.
History has proven that Hellman’s foresight was correct. Decades later, we saw the rise of hotel chains such as Holiday Inn. The transformation of cinema theaters after the 1970s offers another parallel example – multiple smaller theaters under one roof, showing different films, replaced the traditional single large auditorium showing only one movie.
Had Denker followed Hellman’s advice, he would at least have avoided many disadvantages he faced as recorded in this post, while gaining clear advantages such as lower upfront capital requirements, phased construction responsive to market demand, broader geographic coverage, and easier refinancing or profitable resale.
Hi Larry, excellent points and, as with Morocco, Denker (and Hammel) had a reach that exceeded the grasp! That’s partly what makes boom and bust cycles so historically interesting and instructive.