The emergence and popularization of the automobile in the United States of the early 20th century inspired many car owners beyond commuting into town. The poor roads of the era combined with the vehicle speeds and reliability required two or more days of nearly all day driving for 400-mile trips such as Los Angeles to San Francisco. Nearby destinations of 40 miles or less could be visited in a day to include a return trip. Longer trips requiring an overnight stay often left travelers looking for places to pitch tent or to sleep in their automobile if arrangements hadn't been made ahead to destinations and stopovers that also happen to have hotels or inns.
The lack of niche accommodations to fill the need for automobile travelers who only needed an overnight stay to continue their trip inspired many entrepreneurs. The combination of the convenience of a campground with the comforts and respectability of a hotel or inn spurred the creation of the motel. The hotel's architect, Arthur S. Heineman (1878–1974), picked San Luis Obispo as a midpoint location between Los Angeles and San Francisco, which took two days of driving on the roads at the time.
The original plan of the Milestone Mo-Tel was to include both bungalows and attached apartments with parking outside each unit, though some would have a private garage. Each location of the chain was to include laundry facilities, a grocery store, and a restaurant. Each unit included an indoor bathroom with a shower, obviously a level of privacy not found at campgrounds. The exterior of the buildings was modeled after the Spanish missions in California; the three-stage bell tower was a reflection of the Mission San Luis Rey de Francia in Oceanside.
The motel cost $80,000 to build in 1925. It originally charged $1.25 per night per room.
Arthur and Alfred Heineman's Milestone Interstate Corporation was incorporated in an attempt to seek capital from outside investors in order to build a chain of eighteen motor courts at 150–200 mile intervals in response to the growth in automobile travel in California, Oregon and Washington state. At the time, this spacing would have represented a days drive between sites.
The Motel Inn was intended to be the prototype for the proposed chain.
Heineman was unable to register the name as a trademark, which allowed competitors to use the name. Severe competition in the market as well as competitors with lesser designs but lower pricing also hampered his chain from getting off the ground.
The plans for expansion as a chain ultimately disintegrated as the Great Depression caused investment dollars to become scarce and ultimately caused the Heineman brothers to lose the one existing Motel Inn property to foreclosure.
The motel is located at the end of Monterey Street next to the on ramp to U.S. Route 101 in California. Many of the buildings were torn down in 2006; only two fragments of the original buildings exist, including the mission-style bell tower. It can be found at 2223 Monterey Street.
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