The Luther continues to improve in 21st century
The newly renovated Luther Hotel and auto court in the early 1940s in Palacios.

Matagorda County History Website

The Luther Hotel is a Palacios institution that has its roots in the early development of the town.  With the arrival of the railroad, the first decade of the 20th century was a time of new settlements across Matagorda County.  Between 1901 and 1905, the small towns of Blessing, Buckeye, Markham, Van Vleck, Big Hill, Midfield, Cortes and Palacios sprang up on the prairie.
   The Texas Rice Development Company reserved Block C, located between Cary and Duson Avenues, on East Trespalacios Bay for a hotel. 
   The Palacios Townsite Company, a subsidiary of the TRDC, commissioned Victoria architect Jules Leffland to design the hotel, and D. D. Rittenhouse was the contractor/builder. The building materials were shipped from Louisiana via the Southern Pacific Railroad that came to Palacios in 1903.  Longleaf yellow pine was used for the framing and cypress for the siding. The roof was covered with 18-inch shingles. 
The Rittenhouse family and construction workers lived in tents while the hotel was being constructed.
   The new structure was named the Bay View Hotel, and was described in a 1903 Palacios news column as having sixteen rooms.  In August 1904, Charles A. Gonder was the manager and the hotel was reported to have the capacity of 100. By that time, the boom was on and the hotel was too small to accommodate the many visitors to Palacios.  Prospective settlers traveled by rail to Palacios, being lured by “Excursion” rates offered by the Townsite Company, where they were housed in the new hotel. Several of the managers were from northern states and they advertised the hotel as a “Winter Resort,” because of the milder winters on the Gulf Coast, further enticing visitors with the economical rates.  
   A new hotel was being planned. The Palacios Townsite Company decided to move the hotel one-half mile from its East Bay location to South Bay Boulevard to be near the new pavilion, which was under construction.  Leffland also designed the Palacios Pavilion.   Maj. J. J. Wheadon of Galveston was the manager of the Bay View in May, 1905.

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