The cottage of the Santo family on Omena Point. Courtesy Leelanau Historical Society.
Every morning and afternoon when the minister’s sons, the Marbach boys, swam at the Omena beach, they saw an old man slowly puttering along in his ancient Buick. They figured John Santo was inspecting the Omena Inn and his cottage properties as he always had. However, he had lost those properties years ago.
The unraveling of his accumulation of properties began in 1923 when his wife died and his drinking began, according to some. Then the crash devastated the economy in 1929 and one by one, he was forced to sell. The more property he lost, the more his mental facilities slipped until finally his daughter had to take charge of his personal as well as his financial affairs. Soon after the last of his properties were sold off, Santo died. He was just 70 years old. John Santo had once been the largest single landowner on Omena Point. He had been mentally sharp, and physically fit.
John R. Santo (ca. 1903), the year he was elected mayor of Traverse City. Courtesy Sprague’s History of Grand Traverse and ‘Leelanaw’ Counties, Michigan. B.F. Bowen, Publisher.
This is the story of his downfall.
Santo arrived in Traverse City at the age of 29 from Grand Rapids in 1894. Born to a prosperous farming family in Canada, he had worked for a few years in Detroit before moving on to Grand Rapids, where he married Frances Thompson. The couple moved to Traverse City, and in 1999 had their only child, Gwendolyn. Over the next nine years, he became very successful in the insurance business, and was the treasurer of the Traverse City Refrigerator company.
In 1913, he was elected in a close election to be the representative of Grand Traverse County in the Michigan Legislature as a Democrat. They joined the Baptist Church and were part of “the best social activities in Traverse City”.
Economic Boom
Things were going well for him, and by 1903 when he was elected mayor of Traverse City, he was on top of the world. The early 1900’s was a time of economic boom which made the rich richer and the poor poorer. The economic boom, brought on by industrial growth, affected us even up north. The growth of railroads meant they finally reached Omena by 1903, joining steamboats which had been around for ten years as a way to get to Omena. We were more accessible and more appealing to the outside world.
In 1899 Santos purchased a lot and built a cottage on Omena Point. Then he gradually begin buying more and more Omena property. He built rental cottages on some of his properties, naming them Shorewood, Homewood, Idylcrest, and Idlewood. He got his sister, Lena Santo Legg, to build a cottage on Omena Bay. In 1910 he built himself a garage over the water which he could drive his automobile into from the shore road. And he followed that by a 1918 effort to improve the old rocky, washed-out road for his, and his other cottagers automobiles, as they were becoming more and more common in Omena.
John Santo built his automobile garage over Omena Bay (ca. 1910). Courtesy of the Omena Historical Society
Start of Consumer Debt
With new car models and colors, as well as other durable goods like radios, and appliances available, and advertising convincing people they needed them, people began buying on credit. “Every free-born American has a right to own his own necessities,” the industry journal “Advertising and Selling” proclaimed, and consumer debt doubled over the course of the decade. Santo’s debt grew too.
When the large Frank Grave estate went up for auction in 1916, he bought it at auction for a bargain $4394, mortgaging his other properties to have the funds. Three years later when men with lumbering interests were interested in buying the old Omena Hotel Association, he stepped in and bought that too.
Both of these properties had plotted extensive cottage communities with small lots and cheap prices which would have significantly changed Omena, so this was very important for the future preservation of the peace and beauty that we cherish today.
Santo’s transformation of the old manse into a hotel included adding the stone piers supporting the overhanging second floor, and the flanking wings on each side, which tripled the size of the building from its original. It probably opened in 1921. Courtesy Omena Historical Society
In 1920 Santos bought Rev. Peter Dougherty’s old manse and converted it into a hotel, “The New Omena Inn,” adding the flanking wings on either side, and a big front porch with stone piers. Somewhere along the line he bought the Pavilion, which was later turned into the Omena Traverse Yacht Club. By this time he was in debt for more than one mortgage against his properties.
Francis Dies
While his wife Francis was alive, she was “the core of his strength, the great moderator of this ambitious, impulsive and passionate man.” But in 1923 she died, and the poor man was shaken to his boots. His neighbors noticed “diminished mental capacities,” he was not able to think clearly.
Some believed it was caused by alcohol, others thought it was grief.
The Great Depression hits Omena
By the end of that decade when the stock market crashed and the depression reached Omena. Poor Santo was completely undone.
One by one cottage owners boarded up their houses and left with their personal belongings. The string of Santo rental cottages sat empty, many for the next ten to fifteen years. Santo tried to purchase more and more land in Omena which had been taken over by the banks.
The 1903 promotional brochure, Omena the Beautiful, shows the plans for a dense resort development in Omena at the end of the Point. Courtesy Omena Historical Society
Some say he had hopes of saving Omena Point from excessive development. Perhaps he thought it was just a good investment. But when in October of 1929, Santo’s Omena Inn reverted to the First National Bank through a quit claim deed. That was the beginning of the end of Santo’s empire.
He had bought his properties by juggling money, mortgaging one property to purchase another, balancing the debt based on expectations of future prosperity. Called “leverage,” it was gambling, and a classic way to go bust.
Selling off to Hector Carmichael
Santo had an informal arrangement with Hector Carmichael. If Santo needed money, Carmichael would quietly and quickly purchase property from him. Santo existed by selling off his properties one by one.
His property sold for surprising little money compared to todays prices. The mortgage sale announced in the Leelanau Enterprise on January 16th, 1934 stated, “The amount claimed to be due on said mortgage at the date of this notice is $5,770.53 of principal and interest as well as $379.53 for attorney fees.
Added to that was the humiliation of also having published in the Leelanau Enterprise on March 3, 1932, “Gwendolyn Santo Wright, Guardian of Estate of John R Santo, Mentally Incompetent, and Estate of John R. Santo, Mentally Incompetent”. Hopefully by this time he wasn’t reading The Enterprise.
He died in 1935 shortly after the last of his properties was sold.
Santo Empire Ends
The era of the Santo empire had ended. He helped preserve Omena’s shores and woods and helped shape its unique natural beauty. Whether he did it as an investment, or with a vision and passion for Omena’s future we’ll never know. It has been said that John Santo followed the advice of Davy Crocket, who said, “Be sure you are right, then go ahead.” This he did, even into bankruptcy.