Muskegon is situated on the south shore of Muskegon Lake, in the seven-mile-long area from Lake Michigan to the mouth of the Muskegon River. The “Lumber Queen of the World,” as Muskegon was called during the 1880s when it was the largest lumber-producing city in the world, began in 1836 as a single mill site where the Muskegon River flows into Lake Michigan. By 1854 a population of 339 lived in the area, 252 of whom were employed in one of ten mills. The population increased to 1,700 by 1860 and to 2,700 by 1864. The village was incorporated in 1861. The extensive pine land up the Muskegon River continued to feed the mills that ringed Muskegon Lake until, in 1867, forty-six mills cut a record 665,344,000 board feet. It seemed to one chronicler of the time that prosperity “would not soon end.”
But end it did. By 1894 most of the available timber was cut, and the onset of a severe national economic depression caused forty-one of the forty-six mills to close. Several lumbermen remained after their mills closed and set about bringing alternative industry to the Muskegon area. Lumberman Newcomb McGraft sold the city eighty acres of land for $100,000 in a transaction overwhelmingly approved by a public vote. The land was developed into McGraft Park and the proceeds from the sale were turned over for administration to the city's leading lumberman, Charles H. Hackley (1837–1918). Hackley managed the subsidies from the $100,000 and the accrued interest on the unspent balance to attract new industry. Among the fourteen firms drawn by the Muskegon bonus plan, as it was known locally, were the Shaw-Walker Company and Central Paper Company, as well as the Amazon Knitting Company, which employed as many as 600 people. A second such plan led to the creation of the city of Muskegon Heights. A group of leading businessmen bought land, platted it in 1890, and sold residential lots for $130 or $160, depending on their location. The purchase price was payable in installments, an important feature since banks of the time were not allowed by law to use land as loan collateral. The proceeds from the sale were used as subsidies. And Hackley's own donations and monuments to the city were considerable, among them a park ( MU1), a library ( MU2), a hospital, a Soldiers and Sailors Monument (see MU1), a manual training school, and a gymnasium.
The new industry that came to Muskegon was predominantly in secondary wood processing, including manufacturing sawed wood into such products as washing machines and refrigerators. Other industry during the 1920s was tied to automobile production. Tourism was touted to take advantage of the many beaches. Although the extreme wealth of some of the lumbermen was not repeated in later years, Muskegon did not become a ghost town and obtained a longer-lasting economic base.
Today Muskegon County Community College enrolls 5,000 students on its 111-acre campus that spans Four-Mile Creek. Alden Dow and Associates created the primary academic building (1965–1967 Vocational-Technical Wing; 1968 remaining complex) at 221 S. Quarterline Road in Muskegon. With funding from a tax increment financing plan, Muskegon is undergoing some revitalization in the central business district—the downtown, the waterfront district, the Old Town Neighborhood, Centertown, and the hilltop district near Central Park. Downtown Muskegon Development Corporation leads the redevelopment. The first new retailer opened in 2007 in the former Richardsonian Romanesque Century Club building (1889) at 356 W. Western Avenue. Grand Valley State University has research institutes in the central city. The redevelopment supports the city's major cultural institutions.
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