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Sunday, December 20, 2020

High Finance for a Hotel in Downtown Kerrville

Mortgage Bonds, issued by the 'Kerrville Hotel Company,' in 1926

A few days ago, a long-time friend brought an interesting set of financial documents by the print shop, bonds being issued by the “Kerrville Hotel Company” in July, 1926.
I was intrigued, and most readers know I enjoy a good history puzzle. 
The bonds were sold by the hotel company, and jointly by R. L. Burney, E. G. Walsh, and H. M. Harrison. Buyers of the bonds could expect seven percent interest per year, “in United States Gold Coin.” Most of the documents have the interest coupons clipped off, but one still had a nice collection of coupons, offering interest payments of $17.50 in gold. If I could just find the office of the bond’s underwriters, the J. E. Jarratt Company in San Antonio, perhaps I could collect a few gold coins.
I don’t remember a 1920s-era hotel in Kerrville called the “Kerrville Hotel,” so I started investigating.
The first thing I found was a real estate transfer in 1926 from A. C. and L. A. Schreiner to Harrison and Burney, part of lot 25, in the B. F. Cage Addition of Kerrville. Further research said that lot was at the southern corner of the intersection of Water and Earl Garrett streets.
The 1926 developers used similar tactics as developers do today; they made a “definite proposition” to build a hotel in downtown Kerrville if the “city would donate a site at the corner of Water and Earl Garrett streets” (the lot owned by the Schreiner brothers), plus “a cash bonus of $10,000.” Within six hours Kerrville businesses had donated more than $10,000; later the Schreiners would donate the corner lot.
The Blue Bonnet Hotel at five stories
I do remember a hotel which once stood on that corner, opposite Water Street from today’s Francisco’s Restaurant. The grand hotel was the Blue Bonnet Hotel. Today the site is a parking lot.
A story in the March 31, 1927 issue of the Kerrville Mountain Sun about the grand opening of the Blue Bonnet Hotel mentions it was financed by “Harry M. Harrison and R. L. Burney of San Antonio.” It fails to mention the $10,000 raised by Kerrville businesses.
It also has an ad by the general contractor who built the Blue Bonnet Hotel: Walsh & Burney. That ad said the contractors started work on September 1, 1926 and completed the five-story building in March, 1927. (The Blue Bonnet was enlarged to eight stories about a year later.)
Walsh & Burney were busy in Kerrville. They’d already built fourteen buildings at the “American Legion Memorial Sanatorium,” the site of today’s V. A. Medical Center. They built the Sunshine Laundry, which was in the 600 block of Water Street. At the same time they were building the Blue Bonnet Hotel, they were also building a home for Scott and Josephine Schreiner, a beautiful structure which still stands just off of Jackson Road.
And later, at eight stories
Construction of the hotel building cost around $250,000, according to news reports. It was designed by Paul G. Silber & Co., architects, of San Antonio.
One thing I could not figure out, at first, looking at the bonds – the name “Kerrville Hotel” was not the name of the Blue Bonnet Hotel.
It turns out the “Kerrville Hotel Company” owned the building and real estate, and leased these to the “Blue Bonnet Hotel Company.” I think this might be a technique still used in commercial real estate development. 
The president and general manager of the Blue Bonnet Hotel Company was Floyd Singleton. 
The company hoped to build Blue Bonnet Hotels in other cities, including San Antonio. By 1928 it hoped to have six or seven new hostelries open and operating across Texas.
Of course, the Great Depression intervened.
By 1937 both the Kerrville Hotel Company and the Blue Bonnet Hotel Company were in receivership, unable to pay interest or principal on the bonds they’d issued, and the property was sold to new owners.
I guess that means I’ll never collect the $17.50 in “gold coin” I was hoping for.
Until next week, all the best.

Joe Herring Jr. is a Kerrville native who wishes you a very Merry Christmas this week. This column originally appeared in the Kerrville Daily Times December 19, 2020.

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