How Two “Little Old Ladies” Saved the Most Endangered Building in Texas

The 121-year-old Luther Hotel, in Palacios, looked spooky enough to star in a horror flick. When I visited in mid-January, the bottom-floor windows were boarded shut, and the white paint on its cypress facade was peeling in stripes that stretched the length of the structure’s east and west wings. Weeds grew tall around its broad lawn, which hadn’t been mown since the hotel closed its doors in July 2022. The interior, I would soon discover, was worse.

I was there with local retirees Margaret Doughty and Edith Gower, who cofounded the all-volunteer Palacios Preservation Association to save the Luther and find an investor who will restore it. “You cannot tear down something that has such a remarkable history,” Gower told me. The Luther holds the story of Palacios, a small seaside town halfway between Galveston and Corpus Christi. The hotel played an important role in the town’s creation during the early 1900s and in its prosperity during the forties and fifties, and it remained the heart of local social life for decades after that as the site of countless banquets and family gatherings. Still, the odds of saving the Luther were slim, given the state’s wimpy preservation muscles and how close the structure had come to disappearing. About sixteen months ago, the Luther was named the most endangered place in Texas. Now its rescue could turn out to be one of the most unlikely historic-preservation success stories Texas has seen in years.

Doughty and Gower often deflect credit to the pro bono lawyers, investors, preservation architects, engineers, and others who have come to the Luther’s defense. “We’re kind of little old ladies,” Doughty said. I detected a bit of a wink in her cheerfully crisp Welsh accent, before the grit sank in. “We’re not going to be daunted by this. We’re going to find a way to make it work.”

Everyone who knew Jack Findley, the hotel’s last owner, knew how much he wanted the Luther to survive him. It was his late wife’s most cherished family legacy, and he took his stewardship seriously. Findley died of cancer in June 2020 before signing his will, although the hotel continued operating for two more years. To folks who weren’t involved in the place day to day, it seemed logical that someone would take over the Luther: it is the most significant landmark of this quiet little “City by the Sea,” sitting on a prime three-plus acres of Tres Palacios Bay, an inlet of Matagorda Bay.

Findley owned the Luther outright for fifteen years after his wife, who inherited it from her parents, died. Because they had no children, his $4 million estate went to more than thirty members of his family, mostly nieces and nephews, all of whom live in Alabama. The trouble began when the heirs agreed to sell the Luther for $1.2 million (about $300,000 less than its appraised value) to the Ed Rachal Foundation, a politically powerful nonprofit based in Corpus Christi that has been buying up land in Palacios for several years. The foundation focuses its charitable giving on science and education—it is building an important oyster hatchery in Palacios, for example—but its real estate business has a reputation for trying to knock down historically significant buildings. The City of Palacios helped pave the way for the Luther’s demolition when its fire chief targeted the building for code violations. Findley’s estate, not willing to pay for repairs, shut it down.

Preservation Texas issued the “most endangered place” alert after a demolition permit was filed with the Texas Historical Commission. As with all Recorded Texas Historic Landmarks, the permit request was subject to a routine ninety-day moratorium (the Luther also is on the National Register of Historic Places). The measure often does little more than delay the inevitable.

With the clock ticking, Doughty and Gower launched an online petition and rallied a coalition of demonstrators to advocate for the hotel at city council meetings. They got on the phone, calling everyone they knew who might know someone else who could help. “It was one of those experiences of a lifetime, where your neighbors are saying, ‘Something funny’s going on,’ and we got together,” Gower said. A troop of more than a dozen indomitable local characters propels the PPA’s near-constant activities with enough force to light up a feel-good movie—there’s the pretty brunette Lindsey Backen (she also dolls up in period costume as “Lady Luther”); the bearded lumber-company supervisor Brett Ringo; the demure Anna Sac Dao; the petite dynamo Lee Raymond and her husband, Chuck Madeley; the lively Diva Vazquez and her husband, Frank.

The first time I spoke to Doughty, she made it sound as if they all had no choice but to act. “The Luther is our Alamo, and maybe our Astrodome, too,” she said.

It’s not much of a stretch to say Palacios would not exist without the Luther. In 1903, the town was materializing on 20,000 acres of bull pasture that was purchased from a ranch estate by Houston real estate tycoon Walter C. Moore’s Texas Rice Development Company. A post office and a few other critical amenities were built, but the hotel was the fledgling town’s most important attraction, designed to lure in folks who would buy the town’s ranch and farm parcels.

Palacios is still far enough off the beaten track that locals say it’s not a dead end, but a destination. It’s not a place people usually drive through, but to, because its only highway, Texas Highway 35, appears to terminate at its shoreline. At the beginning of the last century, Palacios was truly remote, six hours by train from Houston.

The popular architect Jules Leffland designed the Cape Cod–style hotel with a graceful two-story veranda. Demand quickly outgrew the sixteen-room Bay View Hotel, as the place was initially called. It was moved to its current site in 1905, two years after it opened, and enlarged with two long wings. A three-hundred-foot-long porch unified the architecture and gave guests a slightly better view, overlooking a spiffy new pleasure pier. With its bay breezes, that porch was a draw in itself, touted as the longest in Texas. The rechristened Hotel Palacios had its own orchestra and a dining room that served lunch and dinner daily on Haviland china.

Similar development schemes unfolded down the state’s coastline, creating what architectural historian Stephen Fox calls “an engaging landscape of early twentieth-century Texan leisure.” Fox sent me a list of about ten such hotels, most of them long gone—burned, blown down by hurricanes, or purposefully demolished. The first and most architecturally ambitious opened in Galveston in 1883 and burned down in 1898; the Hotel Galvez replaced it in 1911. The small Tarpon Inn, in Port Aransas; the former Beach Hotel in Port Lavaca, which is now apartments; and the Queen Isabel Inn, in Port Isabel are the other survivors.

“They don’t make hotels like the Luther anymore,” Larry Horwitz, the executive vice president of Historic Hotels of America, told me. “We see some wooden seaside resort hotels in the northeast and certainly along the Great Lakes. But on the Gulf Coast, this is a rarity. Our position is that it is definitely worth saving.”

A hurricane blew down the long front porch in 1915, and the hotel changed hands several times before Charles and Elsie Luther bought it in 1936. They ran it for more than fifty years. During World War II, the Luthers added a motor court (now gone) to accommodate military families visiting Camp Hulen, just outside of downtown. Rita Hayworth, Shirley Temple, Artie Shaw, Guy Lombardo, and other stars checked into the Luther’s suites when they came to entertain the troops. Lyndon B. Johnson, a childhood friend of Elsie’s, visited after Hurricane Carla pummeled Palacios in 1961. But there was more to the Luther than celebrity cachet. The Luthers kept a sign at the front desk that read, “He who enters here is a stranger but once.” Charles and Elsie hosted the town’s Easter egg hunts, Christmas festivities, and July Fourth celebrations on the lawn.

Their daughter, Claire Joy Luther Dilworth, hired managers to run the hotel when she inherited it. Married to a prominent South Texas rancher, she had a full life on a thousand-acre spread in Tilden, 167 miles from Palacios. Her first husband died a year after her father, though. She met Findley at an Arthur Murray dance studio in San Antonio where he taught (she wanted him as a partner because he was the only guy in the room as tall as her). A kindhearted bachelor from modest means, he was born and raised in rural Alabama and was fourteen years her junior.

Jack and Claire Joy were married for twelve years, until her death in 2005. She left oil and gas assets to her daughter, but her land, a San Antonio condo, and the hotel to Jack. He moved to Palacios a few years later to shepherd the increasingly dowdy Luther, intending to establish a foundation to preserve the hotel, as Claire Joy had wanted to do. Life at the hotel suited him better than at Claire Joy’s fancy ranch house or their San Antonio condo. Fond of hanging out on the front porch with guests, he became a beloved Luther fixture himself. “He was this tall, lanky guy with a big smile, as companionable as you’d want,” said Phil Fletcher, who often visited from Austin with his wife, Victoria Koepsel. Fletcher got Findley to Houston for cancer treatment and managed the hotel in the interim. He knew his friend wanted to establish a nonprofit foundation to fund its operation, but Findley seemed unable to make decisions and was reticent to sign paperwork, he said. “Everybody knew what my uncle wanted,” Dee Dee Findley Debter, one of the heirs, told me.

After Findley died, staff who kept the hotel running maintained deep sentimental ties to the place. Karmen Schuster landed at the Luther in about 2018 as an assistant to a friend of Findley’s who came frequently to tidy up the decor; eventually, the two moved in. It was a bare-bones, break-even operation by then, although Schuster felt like she had found a real home there. When the estate and the fire chief shooed them out, she grabbed scrapbooks of old Luther photos rather than her personal belongings.

Doughty and Gower, the PPA founders, moved to Palacios 25 years ago after careers as the directors of major literacy-focused nonprofits. They run a tight ship and are unfailingly polite. From the outset, they have said the PPA seeks a win-win solution for the Luther, their adopted hometown, and the Ed Rachal Foundation. They’re also fun: they count cupcake makers and pizza providers as essential workers in the PPA campaign, and with their irrepressibly good nature, they have no trouble rousing volunteers to show love to “Lady Luther.” They recently marched in the annual Harmonie Club Valentine Sweetheart parade with a giant, shiny heart-shaped sign that read “Happy Valentine’s to the Luther Hotel.” Onlookers cheered.

“It’s Preservation 101,” an impressed Phoebe Tudor said. Tudor is a glamorous, hardworking Houston philanthropist who cofounded the Astrodome Conservancy and serves as vice chair of the National Trust for Historic Preservation Board of Trustees. She orchestrated a letter of support for the Luther from the National Trust, which strengthened the PPA’s legal maneuvers. She meets regularly with Doughty and Gower to help them brainstorm. “It doesn’t get more grassroots than this,” she said. “I like the fact that the local people found out about this and got alarmed.”

Nick Herman, a deep-pocketed Palacios native who has retained his South Texas drawl, called to volunteer after a friend told him the Luther would be torn down. “I said, ‘Nope, that can’t happen,’ ” he told me. “It just got on my bad side. I knew the Luther people. My granddad . . . would take me down and we would see Mr. Charlie Luther. You know how they do; they tip their hats and say, ‘Good morning, Charlie’ . . . that kind of thing.” Herman put a buying group together and offered Findley’s estate a higher bid, for $1.5 million.

The estate would not accept Herman’s offer. But other members of the PPA made waves that were harder to ignore. Roman McAllen—a Houston municipal preservation officer with a weekend place in Palacios—“dropped a bomb,” as the Palacios Beacon newspaper put it, when he presented the city council with correspondence between local officials and the Rachal Foundation that he had obtained through an open-records request. He discovered the fire chief’s visit to the Luther was not a random inspection, but a move that had been planned with representatives of the foundation. (Palacios mayor Jim Gardner and Rachal Foundation CEO Paul Altheide did not respond to interview requests.)

Meanwhile, the clock was running out on the Texas Historical Commission’s moratorium. A demolition crew was in place last February when the PPA reached lawyer Chris Bell, a former congressman and Houston city councilman. Bell worked fiendishly to file a temporary restraining order while valuables and furniture were being hauled out of the building. “For a couple of days we were on tenterhooks just waiting for a judge to see him,” Doughty said. “The community was patrolling the building by the hour, as trucks were coming and going and taking anything of value.” She retells what’s become one of her favorite save-the-Luther stories: She and Gower were in El Campo, exercising in an indoor pool, when Bell called and told them to be at the Wharton County Courthouse in an hour. He was racing there from Houston. With their hair still wet and tags hanging from clothes they bought at Walmart on the way, they got to the courthouse just in time to hear Bell finishing his plea. “He was fabulous, compelling, courteous, and insistent,” Doughty said. “And the judge granted the TRO that saved the Luther.”

Bell was the first of a half dozen quick-witted lawyers who have taken up the PPA’s cause, all pro bono. Through months of maneuvering, they kept the demolition at bay as they poked holes in the estate’s management. Findley’s estate was not being overseen by a probate court—odd, given the money involved in his investments and the hotel. The lawyers suspected the estate was being mishandled. The Findley cousins appointed Jack’s only living sibling, their aunt Annie Ruth Jones, to represent them. She signed the contract with the Rachal Foundation that required the family to tear down the building, but later, when the PPA’s legal team deposed her, she changed course and said she did not want the Luther demolished. Once the PPA team got the case properly into probate, the group had a more solid reason to request that Jones be replaced: she could not legally administer a Texas estate because she lives in Alabama.

Around the same time, the PPA struck another blow: Luther heir Dee Dee Findley Debter signed the “Save the Luther” petition. She was upset that people in Texas were blaming her family for the Luther’s removal, she told me. “I knew that’s not what Uncle Jackie would have wanted. That just weighed on me.” She spoke in a slow, sweet accent that seemed to have been shaped by endless Southern summers. “I finally—I don’t know if it was bravery, but I couldn’t live with myself if I didn’t just do one tiny thing,” she said. It didn’t take long for the PPA to respond and offer legal help. Debter’s aunt and some of her cousins were furious as they watched the first plan to sell the Luther unravel.

The Rachal Foundation let its contract lapse last September. Jones resigned, and the probate judge assigned a state administrator to represent the estate. The PPA compadres were stoked in early January, when the new administrator made her first visit to Palacios to tour the Luther with them. Gower and Doughty, who was calling herself the nagger in chief, wanted to assess the damage and plan a cleanup. “Anything we can do to facilitate the process will make it move faster and more smoothly,” Doughty said.

In pictures taken a few years ago, the Luther’s cozy lobby looks like the carefully arranged living room of a great-aunt, with an oriental rug, a gilt-framed mirror, and silk flowers. By the time our group made it inside, the power had been off for eighteen months, water leaks had gone unrepaired, and the demo crew had stormed through. We wore face masks and headlamps, steeling ourselves for a smelly mess.

Our flashlights cast eerie circles of light over the destruction. It looked as though a tornado had blown through, sucking out chairs and couches but dropping patio tables and window AC units and strewing papers, plastic bottles, kitchen bowls, pillows, and Christmas decorations. A section of kitchen cabinetry leaned against the lobby’s built-in bulwark of a check-in desk. As we made our way through the halls and bedrooms upstairs, we found drug paraphernalia and other signs of squatters. An explosion of blue jay feathers lay in one hall, looking like the remains of a cat’s meal.

Still, it was easy to see what a gem the Luther had been, and could be again. No two of its rooms are the same. A number are apartments with kitchens. Pastel-colored tile walls and showers in most of the 1940s-era bathrooms are in excellent shape.

By mid-February, the cleanup was almost done. Doughty reported that 28 volunteers had contributed a total of 283 hours to the task. “The Independent Sector estimates that the value of a volunteer hour in Texas is $29.86,” she wrote. “That is a grand total of $8,450.38 of love for the Luther and Palacios!” When we last spoke, volunteers were removing the boards from the first-floor windows. Trees were being trimmed.

Everyone I spoke with believes Palacios needs a boost. They hope the Ed Rachal Foundation’s oyster hatchery will bring some much-needed jobs. The hatchery’s work will most certainly help the coastal environment, which can only be good news for a town that already is a haven for birders and fishers. Ryan West, the fourth-generation publisher of the Palacios Beacon, worries about his hometown’s declining population. “We are a community where if one restaurant opens, another one is going to close. We have just been able to maintain what we have,” he said. He would love to see the Luther succeed, but he noted that the city has tried for years to attract a new chain hotel with no luck, because the projected occupancy numbers are always too low.

Nick Herman is optimistic; his projections look good, he said. He and another initial partner have filed a new $1.55 million offer for the property with the administrator and expect it to be accepted soon. They think it will cost another $12 to $13 million to revive the Luther as a boutique hotel, a project that could take three years. Tudor, in her cheerful way, has been asking friends if they want to put a couple million into a hotel in Palacios. Horwitz is working it from Washington, D.C., introducing the project to hotel operators of all sizes in the Historic Hotels of America network. Doughty and Gower are hoping a revived Luther can anchor a local heritage-tourism movement, envisioning that as another source of economic growth for their town. “Guests that could be attracted to the Luther are the type that would stay longer, pay a little more, and spend more in the community,” Horwitz said.

My husband and I drove by the Luther one last time as we left Palacios. It was early morning, and the sun was shining over the bay, bathing the hotel in soft shadows and warm light. Grebes, terns, gulls, and migrating songbirds called to one another through the crisp air. At that moment, Lady Luther looked more romantic than forlorn, like the storied grande dame she is, awaiting her next chapter.