Tuesday, April 5, 2016

Boom & Bust Syndicates

During the 1880s and early 1890s big real estate development "syndicates" proliferated. Platting activities simultaneously peaked in such cities as Cleveland, Chicago, Detroit, Milwaukee and San Francisco.(1)

The previous post introduced one such enterprise in San Antonio, Texas. In New York, Maximilian Morgenthau's syndicate was especially powerful, known for its lucrative ventures on Amsterdam Avenue, 179th, 180th and 182nd Streets.

In Kansas, the so-called "Big Syndicate" formed in the spring of 1887. Organized as the Atchison Land, Improvement & Investment Company, its investors planned to develop a street railway and dummy line.  Missouri architect Max J. Scholer surveyed the proposed transportation corridor and also designed the syndicate's two-story Commercial Street property. He independently acquired properties along the proposed dummy line in the city's Highland Park subdivision.(2)

Later that year, the General Synod of the Evangelical Lutheran Church responded to the boom by establishing Midland College in the Big Syndicate's subdivision. Other municipalities that had vied for the foundation included Beloit, Minneapolis and Topeka, Kansas and Beatrice, Grand Island and Lincoln, Nebraska. But Atchison and its syndicates offered the Synod $50,000 for buildings, 25 acres of land, and net profits from land sales. By January 1889 the college had completed an ambitious new brick and grey stone building.

The 1887 Kansas Boom was short-lived & Highland Park sales were especially lackluster. Within its first two years, Midland College enrollments dwindled by over 25%.

(1) Fisher, Ernest M. "Session of Real Estate Speculation: Speculation in Suburban Lands." American Economic Review 23:1, Supplement, Papers and Proceedings of the Forty-fifth Annual Meeting of the American Economic Association (March 1933), p. 153.

(2) The Atchison Globe (2 June 1887).

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