Introduction: Gulf Stream Hotel Lake Worth Herald/Coastal Observer Installment 1

Most Lake Worth residents are familiar with the historic Gulf Stream Hotel, originally called “El Nuevo.” Building of the hotel started in 1923 and the stately Mediterranean Revival, six story building opened in 1925. Its opening coincided with the end of the Florida real estate boom of the 1920s. That boom opened the world, particularly the northeast and midwestern United States, to discovering Florida as an escape from the frigid winter weather. The advent of railroads and train travel in the last decade of the 19th Century, combined with the introduction later of the automobile and the roads upon which to travel, contributed to expansion of both the tourist trade and permanent residents in the south Florida area. Lake Worth played its own role in this expansion, promoting itself as the “Wonder City”, complete with its own electric power company meant to fuel the growth and prosperity of the area.

This is the first of a series of reading installments that will reacquaint Lake Worth residents, and others, about the city’s early history. Not surprisingly, a good portion of that history belongs to the Gulf Stream Hotel. What follows is a portion of the narrative created to nominate the Gulf Stream Hotel to the National Register of Historic Places, and more specifically the history of the Gulf Stream Hotel. As we will see, the fortunes of the Gulf Stream Hotel as a resort rose and fell over its 90 year history. In some ways it paralleled the fortunes of the city of Lake Worth.

Early in its history the hotel suffered some devastating circumstances that were beyond its control. First, a strong hurricane hit the Miami area in 1926. For many historians this signaled the end of the 1920s boom years of development in south Florida. Investors began to question whether the unbridled growth of the previous years, much of it based upon rampant speculation, could continue. Then, in 1928, Lake Worth itself was hit by one of the strongest hurricanes to make landfall ever in the continental United States. The hurricane’s impact on the Gulf Stream Hotel was so severe the hotel would remain closed from the damage for eight years.

Upon re-opening, the hotel found its niche through aggressive marketing almost immediately. Under the same ownership, it stayed open during World War II, catering to officers and others stationed here during the war years. After the war years turned out to be the best years for the Gulf Stream Hotel.

Read the following portion of the National Register Nomination as written by Leslie Divoll, AIA back in 1982. The property was placed on the National Register of Historic Places in 1983. Stay tuned for further installments. Note that the text has been edited slightly for purposes of this publication. If you wish to review the footnotes that accompanied the original, please contact the publisher.

STATEMENT OF SIGNIFICANCE

The Gulf Stream Hotel is a landmark in Lake Worth: the best hotel in the largest building occupying the most prominent site, built during the years when the town's character was established. It is a rare survivor among the resort hotels built along Florida’s southeast coast during the 1920's Land Boom era. The hotel is significant in the area of commerce because it was a product of one of the most prolific architect-commercial finance collaborative of its time; and because it exemplifies the development of Florida's Gold Coast. The operation of the hotel in tandem with spring and summer season hotels in the North illustrates an important economic and social feature characterizing resort hotels until the close of World War II. The architecture and interior spaces are characteristic of the genteel tastes of a conservative, socially exclusive leisure class clientele. The hotel is nearly unchanged physically, in its operations, and in the patrons it attracts.

DEVELOPMENT FEVER

El Nuevo Hotel was conceived in early 1923, a result of the development fever that created most of the towns along Florida's southeast coast. The entire nation was aware of opportunities available in the narrow stretch of land between the Everglades and the Atlantic. The Seaboard Air Line and the Atlantic Coast Line railroads made it accessible. The State of Florida and competing canal companies drained areas of the Everglades to create farm land. Henry Flagler, railroad and resort developer, staked farmers with seed, fertilizer, and a weekly wage to promote agricultural freight traffic on his railroad. A nationwide decline in farm prices deflated land speculation in other areas. Florida lands were undeveloped, and its benign winter climate so near northern population centers made the resort areas a land of speculative opportunity. Real estate companies established farming and resort communities on paper, then sent representatives to every state and Canada to entice purchasers with giveaway deals. All advertised heavily in northern newspapers; the press in turn focused attention on Palm Beach, the world's most fashionable resort, and its environs.

Thousands of settlers entered the Everglades region from 1920 to 1925 to acquire lands and cultivate crops, millionaires and nobility established a winter resort season in America, and following them flocked people of moderate wealth seeking relief from the winter and good property investments. There were not sufficient hotel rooms to meet the influx of business travelers, seasonal tourists, and new residents without homes. The towns that had hotels were at a decided advantage in competing for tourists and real estate buyers. It was in this investment climate that El Nuevo Hotel Company was formed.

Those behind the venture sought a lucrative investment in the fastest growing part of the nation. They were not hotel operators: chief organizer G. H. Glover was a field correspondent of Forest and Stream from New York; Dr. William Nutter, a medical doctor from Lake Worth; Frank Heywood, a manufacturer from Minneapolis. Other local stockholders and two local banks were eager to "cooperate and assist in every way possible". Explained Glover, "Lake Worth needed a big modern hotel, and I had enough faith in the town to see that we got it. . .the two banks got behind the movement in the interests of a bigger and better Lake Worth." He predicted that with the building of a modern hotel, "Lake Worth will increase its tourist population and experience a decided permanent growth."

ARCHITECT AND FINANCIER

The Gulf Stream Hotel was designed by G. Lloyd Preacher & Company, architects and engineers, and was financed by G. L. Miller Bond & Mortgage Company.

Geoffrey Lloyd Preacher began architectural practice in 1910 in Augusta, Georgia, and eventually established offices in New York, Indianapolis, Memphis, Raleigh, Spartanburg, Miami, St. Petersburg, and San Francisco, with headquarters in Atlanta. Preacher organized his firm so that it had "departments for every class of architecture, engineering, finance and supervision" gaining the "confidence of financiers, developers, and builders". The firm was phenomenally successful, by some accounts grossing $12 million in the first quarter of 1923, worth about $55.6 million in 1981 dollars. Fees in that amount would suggest that in the first quarter alone of 1923, G. Lloyd Preacher & Company was responsible for $200 million in construction activity. If built in 1981, that work would cost roughly $928 million. At the time that the Gulf Stream Hotel was announced, Preacher was introduced as the architect of the recently completed El Verano Hotel and the Citizens Bank Building, both in neighboring West Palm Beach.

GULF STREAM CONSTRUCTION

he building permit for the original design was taken out in the amount of $225,000 in May, 1923, the largest permit in Lake Worth's eleven year history. After two months of construction, during which the concrete frame was built, all work halted because of financial difficulties. Work resumed eight months later, in March of 1924, following design cutbacks by Preacher, reorganization of the El Nuevo Hotel Company Board of Directors, and selection of a new contractor.

By the end of June, 1924, the building was identified as "the Gulf Stream, Lake Worth’s $400,000 fireproof hotel”, scheduled to open before October 1. Six weeks before the scheduled opening, the bond issue was increased by $65,000 with the consent of the G. L. Miller Bond & Mortgage Company. Scheduled opening date was moved to November 1, with much of the delay attributed to slow shipments of materials. The informal opening finally took place on December 10, with the formal ceremonies and dedication on January 20, 1925. At that point, the hotel was described as having been built "at a cost in excess of $600,000", 140% over the original contract amount.

ECONOMIC COLLAPSE

The timing of the opening was unfortunate. In Miami, extortionate rates prevailed due to a shortage of hotel rooms. Record breaking tourist traffic, construction material freight, and a bumper winter harvest from the newly created farmlands combined to overload the railroads’ capacity. Finance scandals and land sale swindles were in the news, and Florida was getting a reputation for unbridled greed. Speculation reached its apex in the summer following the Gulf Stream's first season; by September, 1925, Florida's prosperity collapsed. All hotels and businesses felt the impact. In September, 1926, the worst hurricane in Florida history struck Miami, devastating the southeast coast. Two years later, again in September, another hurricane struck Palm Beach with great property damage and hundreds of deaths due to immense waves and flooding. The Gulf Stream Hotel was Lake Worth's only Red Cross hurricane shelter. The 132 miles per hour winds had blown the roof off, the fifth and sixth floors were severely damaged, and the Gulf Stream was reported to have seven feet of sand in its lobby. The crippled hotel opened again for an abbreviated season. The next fall the stock market crashed and the Gulf Stream went bankrupt.

MARSHALL AND MADDUX

Closed until 1936, the hotel was ordered sold at auction to pay tax leins against it. Hygeia Hotel Company, Inc. was the only bidder, paying $25,000. The Company consisted of General Richard C. Marshall II, a consulting engineer and retired WWI Army officer; and Colonel H. C. Maddux, a medical doctor and administrator of military hospitals in Europe during WWI. Upon their return to civilian life, the two had gone into business together, acquiring ownership of perhaps as many as 16 hotels lost in the early years of the Depression. From bankruptcy sale advertisements, Maddux selected the Gulf Stream as the cheapest hotel buy with the most chance of success, and sent Richard C. Marshall III as trustee to bid on the hotel.

Marshall and Maddux borrowed an additional $25,000, and within six months had completely repaired and reconditioned the hotel. Their aggressive advertising campaign included sequential signs of the "Burma Shave" type, newspaper and radio advertising, and young men handing out brochures at major intersections up to 300 miles from the hotel. The Gulf Stream was an immediate success, and quickly established a reputation of providing excellent value for the money, delicious food on the American plan, a superior class of guests, and an abundance of diversions for the vacationer.

Marshall and Maddux began an expansion program that was responsible for the Gulf Stream's survival. They bought almost the entire city block and built an informal bar and restaurant separate from the hotel building, thus correcting a Volstead era deficiency without offending the non-imbibing guests. The other buildings on the property became the Gulf Stream Lodge and the Gulf Stream Annex, offering apartments on the European Plan. Marshall and Maddux operated the Martinique Hotel in Washington, D.C., where General Marshall spent much of his time. The 175 room Hotel Monterey in West Palm Beach was acquired in 1938. In the summer of 1940 they began operating the Admiral Hotel, "one of the most luxurious shore resort hotels on the Atlantic coast. . .the largest south of Atlantic City". Many members of the Gulf Stream management and staff worked winters at the Gulf Stream and summers at the Admiral. The Admiral Hotel is now a religious retreat, part of the Cape May National Landmark Historic District. In the fall of 1942, Marshall and Maddux acquired The Kirkwood, a 164 room golf, tennis, hunting, and Horseman’s resort in Camden, South Carolina.”

(Published with permission, Lake Worth Herald, c. 1990)