A Brief History of Lake City:
The Mining Era, 1874-1904
Settlement & Town Building: Winding Down
By 1878, Lake City's settlement boom had ended. Mining experienced a sharp decline because major mineral deposits had been located and depleted. Population dwindled substantially as miners moved on to silver strikes in other San Juan mining districts and at Aspen and Leadville.
Local businessmen who had eagerly anticipated construction of the rail line would wait an entire decade. A brief boom in 1880 and 1881 was stimulated by mining activity at Engineer Mountain and speculative anticipation of completion of the Denver & Rio Grande Railroad into Lake City.
Several brick buildings and a few residences were constructed during this period and a telephone line installed in 1881 connecting Lake City to Silverton. From 1882 through 1889, town and surrounding mining districts remained in an economic slump. The Crooke Mining and Smelting Company closed in 1883.
Completion of the Lake City Branch of the Denver & Rio Grande Railroad in 1889 stimulated mining in the following decade and spurred population growth and some residential expansion. The town population doubled and numerous new houses were built. Some property owners expanded their dwellings with large additions. New residents also moved into dwellings that had stood vacant in the 1880s.
During the 1890s, Lake City gained additional urban amenities. The town approved municipal bonds to install a municipal water system in 1890. The following year, a local power plant electrified and illuminated houses and businesses.
By 1905, the mining era was over and Lake City entered a decades-long period of economic decline. Population figures hovered at 1,000 then dropped to 400 after 1910 according to the Colorado Business Directories. At least half the town's buildings stood vacant. Many were torn down and used to construct additions and sheds. Others perished in fire.
As demand for building materials disappeared, the town's lumber yard closed in 1905. The Thatcher Brothers, owners of the Miners and Merchants Bank, acquired scores of real estate lots and buildings within the city through foreclosure. Finally, the Miners & Miners Bank closed its doors in 1914.
Although mining continued throughout the twentieth century, it consisted primarily of exploration and speculation rather than productive operation.
Beginning in 1915, visitors began coming to Lake City for the entire summer season. Not until the 1930s did tourism emerge as a viable industry. The period of economic stagnation from 1905 through 1935 discouraged new construction in Lake City; at least half of the historic building stock remained empty.
Although a number of properties were lost to fire or deterioration, the prolonged slump also protected the town's historic properties from substantial alterations or from demolition for construction of new buildings as has occurred to many other 1870s buildings in Colorado.