In the mid-1830s, Nicholas Biddle, president of the Second Bank of the United States, induced a group of investors to build cities along good harbors in Michigan. A partnership of New York and Philadelphia capitalists formed, and the Port Sheldon Land Co. was established, with aspirations of transforming the wilderness of Port Sheldon, in Ottawa County, into a city the size of Chicago.
The total plan, orchestrated by Biddle’s bank, was said to have a proposed price tag of $200 million.
A railroad spur started the town, along with a large hotel called The Ottawa House, which featured gambling halls.
The hotel would soon become the subject of legend, as it was reported to be the location of the greatest amount of money ever buried in Ottawa County’s history, reportedly $250,000. That's equal to stashing away more than $4.7 million today.
An elegant map of the harbor and commercial division plots was engraved and published to attract investors. The “Chicago-like” city made a fine show on paper.
There were 142 blocks, with 24 lots to a block. Seven lots were reserved for churches, one for a fish market, two for markets, four for a railway depot, one for a city hall and one for a schoolhouse. The railroad was laid out through the city, with piers from Pigeon Lake to Lake Michigan. The surroundings of the harbor were gloriously outlined on the map.
Six months into construction, first-class buildings were finished and occupied. A large general store for the company was put up, which was immediately stocked with every imaginable item, some too rich and fashionable for the inhabitants of this country.
A sawmill was soon in operation. All the buildings were principally made of wood, as no other material was available. It was reported general superintendents spearheading the bankrolled effort were Saunders Coates, Alex H. Judson and E.P. Deacon.
A splendid hotel, called The Ottawa House, was built at a cost of $60,000, the equivalent of about $1.14 million today. The hotel was constructed in the wilderness, off the beaten path.
The Ottawa House, under proprietor Charles T. Badger, opened Dec. 1, 1838, and offered 29 rooms.
A terrible commercial crisis that soon ensued, followed by the discovery — all too late — that the harbor could not be kept open obliterated the city.
Sinking into bankruptcy, the company abandoned the project, bought off those who had made investments, paid for their improvements, assuming to themselves all their losses, dismantled their mill, moved off all that was movable and abandoned the place.
After the dust settled, Mr. Pike, sole occupant and sole agent, remained on-site for several years, selling the hotel and 30 lots for less than the cost of the glass and paint. The rest of the land had been sold chiefly for the hemlock bark that was on it.
Legend has it that, in 1839, a mob of investors planned a raid on the hotel to collect unpaid money from Nicholas Biddle. Fearful of the plot, it is said Biddle buried $250,000 in a well near the hotel.
The raid did not materialize, but Biddle was afraid to touch the buried money and died on Feb. 27, 1844, without revealing its hiding place.
One report published a few years ago stated that the “old hotel still remains, although in a very dilapidated condition.”
However, the hotel actually met its demise by 1859, when the final remnants of the structure collapsed. The abandoned site had been pillaged for lumber and firewood beginning in 1847.
Historical investigators have reported the cache “hidden in a well” near the hotel has never been found.