Nestled at the foot of 3,000-foot Mount Marathon, Seward is set on Resurrection Bay, a scenic harbor on the southern side of the Kenai Peninsula. Seward's fortunes involved the transportation industry, beginning with a Russian boat-building enterprise established in Resurrection Harbor in 1793. Nothing remains of this site, and the settlement did not survive. The railroad was the industry that ensured the success of Seward, founded in 1903.
In 1902 a group of Seattle investors headed by John E. Ballaine surveyed a course for a railroad to interior Alaska. Resurrection Bay, cherished as the northernmost ice-free port, was selected as the terminus. Although his partners never thought that the site would be more than a temporary construction camp, Ballaine saw its potential as a permanent city. In 1903, his agents negotiated with Mary Lowell, a Native who was the only resident of the projected townsite. She filed a homestead claim and then Ballaine bought her property, securing title to the townsite. He laid out the new town in a grid plan and named it Seward.
Construction began on the Alaska Central Railroad, but by the time the road had reached 20 miles north, Ballaine sold his interest in the railroad, keeping his investment in the town. By 1907 the investors ran out of money and construction was halted at mile 51.
In 1909, armed with fresh capital and a new name, the Alaska Northern Railroad continued construction, this time reaching mile 72 before running out of money. After intense lobbying, the U.S. government bought the railroad as it existed in 1915 to use as the first 72 miles of the Alaska Railroad. The Alaska Railroad initially located its headquarters in Seward but moved to Anchorage two years later. The railroad reached Fairbanks, 470 miles from Seward, in 1923.
In the first decades of the twentieth century, Seward was also the terminus of the Iditarod Trail, an overland route to the goldfields of the Iditarod. Besides having a healthy fishing industry, Seward still serves as a major transportation point, being a stop on the state ferry system and the terminus of the Alaska Railroad.
As platted by civil engineer C. M. Anderson, Seward had wide streets and narrow lots. Jefferson Street was 100 feet wide, with all other east-west streets 66 feet wide, and north-south streets 80 feet wide. The lots were 30 feet by 100 feet, which perhaps dictated the small size of the houses. Development began on the south side of town, initially concentrating south of Jefferson Street. With the railroad terminal on the southeast edge of town, the heart of the city was in those first few blocks. In addition, Lowell Creek ran down Jefferson Street, impeding circulation. The U.S. Army Corps of Engineers' first project in Alaska was a 400-foot-long diversion dam, constructed in 1939–1940 to divert this creek from the streets of Seward. During the 1964 earthquake, Seward's waterfront, and the docks and railroad yards vital to the town's economy, were destroyed. The railroad terminal and small-boat harbor were rebuilt farther north, and the town began expanding in that direction. Unstable lands beyond Sixth and Railroad avenues, on the edge of the water, are used as parklands.
Seward's buildings are small and mostly wood framed. New commercial buildings in the older section of town tend to be large but not tall. The houses, which are also located in the old part of town, favor the bungalow form, or even smaller cottages; plain, one-story, gable-fronted buildings are also common. Particular to Seward is the popularity of stucco covering. Applied to older buildings in the 1910s or 1920s, or covering then-new buildings, stucco appears to be the historic cladding of choice.
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