IF YOU’RE IN NEED OF A BARGAIN GETAWAY, come along some weekend to the Texas ghost town that was saved by a beer joint. Gruene—pronounced “Green”—occupies a bluff overlooking the Guadalupe River near the midpoint of the reborn Austin—San Antonio corridor, just two miles from frenetic Interstate 35. It was annexed by New Braunfels in 1979, and without a trace of architectural concession, a suburban-anywhere neighborhood of brick homes has pressed close around the old village. But for tourists, Gruene’s charm is still distinct from the area’s Wurstfest and Schlitterbahn bent. There are decent restaurants, two rustic inns, recreation on one of the state’s loveliest streams, a live-music venue that is a Texas institution, a wealth of idle strolling, and a reassuring sense that in a time of excessive cul-de-sacs and phony frontier kitsch, this is one of the good things that happened to the Hill Country.

A pretty stretch of the Guadalupe breaks toward a low bridge under the bluff, then broadens out, green and translucent, in the shade of cypress trees. When Henry D. Gruene got rich, he chose not to situate his Victorian mansion with that fine view; he put his barn and corrals back there instead. His parents had arrived in New Braunfels with other German immigrants in 1846. In 1870, at age twenty, he made a cattle drive to Kansas, Utah, and Wyoming. Within a few years he married and started his life’s work: buying land and building a town for sharecroppers who planted his acreage in cotton. Gruene’s first business was a cotton gin, followed by a sawmill and a gristmill, and—in 1878—the dance hall and saloon. A sign in German read, “The Best Whiskey, the Best Beer, You Get at Henry’s Here.” According to one of Henry’s descendants, the town’s social life may have peaked on the day in 1911 when a large crowd assembled for their first sighting of an airplane. The aviator acknowledged them with a dip of his wings, fireworks went off, and the whiskey and beer poured on. Later that afternoon two cowboys got into a Bowie knife fight; Henry himself broke up the fracas with a warning shot from his .44.

After the patriarch died in 1920, his small empire went the way of the Depression. The last person of official capacity in Gruene is said to have hanged himself from the water tower in the twenties. The dance hall, called Gruene Hall, had known the polka, the Charleston, and the black bottom, but by 1975 it was boarded up and cloaked with dust and cobwebs. A couple continued to lease the joint, and after work a few locals drank beer around the bar and a potbellied stove. The gristmill was a picturesque ruin of buff brick walls; the mansion looked too far gone to save. Gruene was ripe for bulldozers. But just in time, the San Antonians came to town—among them Pat Molak, a gregarious ex-stockbroker in his thirties, and his friend and business partner, Mary Jane Nalley. Molak bought the dance hall but laughed at the notion of a long-range plan: “At this point,” he told me then, “it’s a matter of trying to have enough cash to buy beer when the beer man comes.”

All at once Gruene was crawling with Molak’s high school chums from Alamo Heights: One did some preliminary restoration work on the mansion and tried to turn the building that housed the town’s electric cotton gin (built in 1923) into a winery. A man named Chip Kaufman arrived from Austin with a kayak on the roof of his car, bought the gristmill, turned part of it into a one-room apartment, and pondered the challenge of how to cover enough sky to turn the rest into a restaurant. He got Gruene certified on the National Register of Historic Places but soon ran out of money. Trying to hang on, he sold the water tower to a local developer. “I looked up and saw the crane,” Molak recalls, “and thought, ‘My God, if you’ve got no water tower, you’ve got no town.’” A New Braunfels judge ordered the two men to settle things fast. Molak and Nalley eventually bought the property and made the ruin into the decked and semi-open-air Gristmill Restaurant, which is still going strong.

The rebirth of Gruene coincided with the Guadalupe’s emergence as the state’s favorite spot for canoeing and other white-water sports—a development that still rankles some landowners along the river. In the late seventies all sorts of Gruene enterprises came and went. Joe Sears and Jaston Williams staged one of the first performances of their Greater Tuna there. But from the start Gruene Hall was the cash and bell cow: Musicians took one look at it and fell in love. Jerry Jeff Walker, Asleep at the Wheel, Delbert McClinton, George Strait, Joe Ely, Kelly Willis, the Fabulous Thunderbirds—whoever was hot in Texas wanted to play in Gruene on a weekend night. In addition, Nalley started booking promising young performers like Robert Earl Keen and Jimmy LaFave to play Sunday afternoons without a cover charge. “Hal Ketchum was working in Gruene as a carpenter when we met him,” she says, “and Lyle Lovett’s first shows were almost painful. He was just so shy.”

The look of the place attracted several shoots of music videos and TV commercials, and inevitably Hollywood got in on the act. Here was where Meg Ryan jumped out of a cake at Dennis Quaid in 1993’s Flesh and Bone. And for a few days this spring, John Travolta could be found hanging out at the bar during the shooting of the forthcoming Michael. Nora Ephron, Michael’s director and screenwriter, sent scouts through several states searching for a saloon that matched her exact description in one particular scene. Gruene Hall, they reported, was the only place.

I lived in New Braunfels and the nearby countryside for most of the seventies. Gruene was a centerpiece of my social life as a youth, and a recent trip there with my wife felt like a homecoming. We arrived on a Saturday and found that Henry Gruene’s mansion has been exquisitely restored by Bill and Sharon McCaskill, who made their stake in Gonzales in the natural gas business. They live in the main house and don’t rent its rooms; the Gruene Mansion Inn consists of farm outbuildings, original and imported, set on the ridge above the river. “We spent three years and put seventy thousand miles on a van just driving around looking for historic property,” Sharon told me. “Great way to see the country.” The inn units have names like Corn Crib Cottage and Gasthaus Am Fluss (“Inn on the River”). Prices run from $85 to $200 a night, most in the lower end of that range, with a two-night minimum on weekends. “Zane Grey Victorian,” my wife noted, summing up the pleasing odds and ends of our loft: barn-wood walls, shiplap ceiling, glass doorknobs, wicker rocking chair, bathtub with feet, brass bed. We unwound from the drive on the porch, enjoying the breeze, the river view, and the birdsongs and then struck out.

You don’t have to hike very far to experience Gruene—it covers only about twenty acres. Molak and Nalley have put their business office on the second floor of the red brick Mercantile Building, which used to be a saddletree factory. The ground floor is divided among antique consignors who offer the usual array of sixties LPs and campaign buttons but also some choice armoires. Gruene has more than a dozen other antique and small gift shops and the pottery workshop of a subtly impressive stoneware craftsman, Dee Buck.

Across the street is the Gristmill, where my wife and I stopped for Bloody Marys. As Willie Nelson sang “Georgia on My Mind” on tape, we looked at a menu, thought about an appetizer, but wound up ordering a combination of lunch and dinner that might be termed “luncher,” the meal that lasts. In tune with the times, the Gristmill’s fare has lightened up in recent years. But it had been a while since we had had chicken-fried steak, and they do it well, so what the hell: We went for it.

A few hours later, we awoke in the loft from our nap, and it was nightfall. We watched the light and river from the porch and cleaned up and dressed for the evening—to the extent you do that in Gruene. We strolled back to the Gristmill and had a couple of whiskeys as we conversed with a pleasant young bartender. Then we walked a hundred more yards and went inside the saloon to see Omar and the Howlers and Leon Russell at a distance of about fifty feet. Molak and Nalley have made the necessary concessions to New Braunfels’ plumbing and fire codes, but they’ve declined to tinker with the entertainment chemistry. They didn’t try to air-condition Gruene Hall, and they didn’t buy a liquor license; Henry’s sign would have to be revised to say “Beer Here.” The local business ads with three-digit phone numbers remain exactly as the current owners found them.

For shows like this one, people come early to claim the benches of the plank tables, and area cops who moonlight as security guards are always telling others that they either have to stand off to the side or sit down on the floor; ain’t no room for dancin’. That night a young Hispanic man exhibited a bit of attitude in the jostling, but then so did the ruddy-faced cop who hectored us. A guy with a black hat and a hand in the hip pocket of his date’s blue jeans looked at me and winked: “How many cowboys can he whip?”

My wife and I got a breath of air in the wooded beer garden, where some kids were pitching horseshoes. Back inside we found seats on the floor. It was the first time I’d seen Omar. The man can howl, and his guitar is chartreuse. A fellow my age from Houston watched me scribble “Cross between Delta blues and ZZ Top” in my notebook and asked me what I was doing. I explained, and his wife, who looked none too comfy on the splintered floor, stared at me aghast. “You mean you have to stay here?” (Okay. Gruene is not for everybody.)

I’d remembered Leon Russell as a man of fair height, but in fact he’s quite short, and like most of his fans from the sixties and seventies, he has spread out some. His cascade of hair and beard is snowy white now. My wife murmured that he looks like a troll. I’d say Santa Claus with a cowboy hat, if not for the hawklike gaze. He sat down at his piano, then after a curt nod to the crowd, his hands were flying, and the joint was roaring. His son, who has dreadlocks, was the drummer. My gaze kept falling on a pair of rapscallions who looked like they had arrived at middle age by way of the Hell’s Angels, Charles Dickens, and Robinson Crusoe. One supported himself with a cane and honored his hero with sweeping gestures of a top hat. None of Russell’s material was new, but who cares? The old stuff was terrific. “And I hope you understand, I just had to go back to the island . . .”

If we had been inclined to do anything energetic, Sunday would have been the day. Businesses that rent canoes, rafts, and inner tubes are strung along the county road that follows the Guadalupe from New Braunfels’ outskirts to Canyon Lake. Two of the most elaborate, with guided tours arranged as far away as Costa Rica, are Rockin ‘R’ River Rides (run by a Gruene longtimer with the engaging name of Zero Rivers) and the Gruene River Raft Company. But after lunch at the Adobe Verde—a Mexican restaurant in the building that once housed the electric cotton gin—I investigated instead the newest outdoor rage on the Guadalupe. At a well-stocked store called Gruene Outfitters, I looked up Ray Box; when I first knew him, he was a teacher and then a homebuilder in New Braunfels, and one of the familiar crowd at Gruene Hall. Now he’s a retailer, guide, and teacher and booster of Texas fly-fishing.

Anglers have long known about fly casting for warmwater bass and sunfish on the rock-bedded rivers of Central Texas, and saltwater fly-fishing for redfish, trout, and flounder has recently caught on big in the shallows of the Gulf. But Gruene supplies a convenient home base for what Box calls the state’s third season: brown and rainbow trout. The Guadalupe water that comes out from under Canyon Dam is extremely cold, and several years ago the Texas Parks and Wildlife Department began stocking the Rocky Mountain species in the river. The rainbow trout not only adapted; they are thriving and evidently reproducing. They seek deep water as the year warms up—the fishing would be disrupted anyway by the white-water traffic, a season anglers deride mildly as “the tuber hatch”—but during the cool months, fly casting for trout on the Guadalupe impresses even veterans of the sport from Colorado and Montana. In fact, this eight-mile stretch of river has now attracted the Texas chapter of Trout Unlimited, which is the largest in the nation.

Next time I’ll bring my fly rod, but we spent that Sunday reading, talking, dozing in the loft. By late afternoon the village was almost deserted. We had set aside the evening for the most formal dining in Gruene. With the lavish refurbishment that marks the rest of Gruene Mansion Inn, in March 1995 the McCaskills unveiled an American and continental restaurant of Alsatian flavor—and with a good wine list. But first we wandered back over to the beer joint for the free music show. About sixty people occupied the tables. Some of their children whacked balls around the pool table and played tag on the dance floor. Set up against the bar that week was not an ambitious newcomer but Steve Fromholz, a veteran of “the great progressive country scare,” as he terms his heyday in the seventies.

Fromholz realized he didn’t want to topple over some day playing barroom gigs, so when the platinum records failed to materialize, he got himself another trade. He partly makes his living these days as a guide of wilderness white-water treks. But Gruene Hall clearly contains a wealth of memories for him, and his audience of peers was just as awash in nostalgia and fondness for this decrepit, evocative place. He played with the same guitarist who showed up with him fifteen years ago. He wiped his face and mustache with what looked like the same bandanna. He can still sing, and he’s still funny. He got the crowd laughing with a routine about a geriatric mobility aid he wants to market as the Jerry Jeff Walker. A man sent his little boy over to put some money in a large jar positioned on a barstool. The dropped quarters rang loudly, which drew another laugh. “Bless you, child,” said Fromholz, “for giving this old hippie gentleman a tip.”