The county seat (1875, 8,671 feet) was founded by Enos T. Hotchkiss as a stop on his toll road between Saguache and the new gold rush town of Howardsville. Hotchkiss lingered at Lake City after he discovered the Golden Fleece lode. He platted the town on the usual grid, in the valley where Henson Creek joins the Lake Fork of the Gunnison River. The remote town, isolated by high peaks, was named for nearby Lake San Cristobal, the third largest natural lake in Colorado.
The boom-and-bust cycles of most mining towns were accentuated in Lake City. During the initial 1877 boom an estimated 136 buildings were completed, including two smelters, the courthouse, and a dozen businesses. A second boom in the 1880s produced a now-vanished brick school (1881, Robert S. Roeschlaub), the Hough Block, and a number of stylish brick residences. The 1893 depression nearly drowned Lake City, although the D&RG spur line remained until 1933. Now primarily a summer town, Lake City has installed plank sidewalks and preserved many of its silver-era structures. Stone and false-fronted frame buildings, generally in the Italianate style, characterize a well-preserved business district. Lake City remains one of Colorado's most scenic mining towns with local preservation guidelines as well as National Register Historic District designation.
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