In its heyday, the Arcade Hotel was recognized as a leading commercial center in the downtown business area. The atmosphere created by the large skylighted arcade of shops undoubtedly promoted that commercial activity.
The original building consisted of the four story element which formed the northwest corner of the Arcade was erected circa 1860. While this original building once belonged to the Whiteley, Fassler & Kelly Reaper Works which began operation in 1856, the exact construction date for the original building is not known.
The remainder of the Arcade which nearly surrounds the original building was erected in 1883, at a cost of $125,000.
The Arcade Hotel addition was constructed in 1883 by prominent area businessman, Oliver S. Kelly. The Arcade was constructed on the old factory site of the manufacturing company of Whiteley, Fassler & Kelly which had been disbanded. Due to its location and its unique feature, an Arcade lined with commercial shops, it was a hub of activity.
Various businesses occupied the commercial spaces. There was a post office located at the first floor at the southwest corner of the building. The lower floor at the south side was occupied by the passenger and baggage offices of the C., C., C. & I Railroad. The northeast portion of the building housed Nelson's Business College. The rooms at the north side of the second floor were occupied by various professionals or small businesses including doctors, lawyers, artists, architects, real estate agents, patent agencies and engravers.
In 1908, William H. Rockel in his book, Twentieth Century History of Springfield, noted that the Arcade Hotel was the leading hotel in Springfield. By 1922 the Arcade, being of wood frame construction and lacking the fire resistant qualities of steel frame construction, faced increased competition from the new steel frame hotels such as the Bancroft, Heaume and Shawnee. Nevertheless, the Arcade Hotel continued to be a center of business activity and a vibrant force in the downtown community well into the mid-twentieth century.
With the rise of the suburban shopping malls as an economic force and the subsequent flight of commercial activity thereto, the Arcade steadily declined and fell into disuse. By the early 1970's the hotel was less than half occupied and extensive maintenance and repairs were required in many areas of the building .
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