By the 1850s San Gregorio was a booming town, when wealthy San Franciscans would travel to the San Gregorio House by stagecoach to enjoy activities such as fishing, hunting, sea bathing, and boat races.[3][4] The structure was expanded in the 1850s, to accommodate the crowds and included a saloon with a dance hall, liveryman's cottage, laundry, smoke house, granary, carriage sheds, power house, water tower, and numerous barns.[5] All of the original structures still stand with the exception of the cookhouse and livery stable.[6]
George Washington Tully Carter purchased an existing house in 1865[7] and added a second floor in order to open a hotel.[6] In 1875, John Evans purchased the building and added seven bays to the three-bay house.[5] From 1888 until the 1930s, Jesse Palmer and Frank Bell ran the hotel.[5] It's previously known as the Palmer Hotel and the Bell Hotel.[2]