In the mid 1830's, the Milan Canal Basin was excavated at the site of Merry's Mill Pond in a U-shaped bend in the Huron River below the village and near this site. A new river channel, with a dam and a covered bridge, was then constructed to bypass the basin. Fourteen warehouses were eventually erected on the basin's south bank, and most had offices built midway up the hill and connected to the warehouses by railcar trestles. Grain wagons leaving the square in Milan descended only partway down the hill to the level of the offices, where the grain was weighed and then sent by railcar to the upper story of a warehouse on the basin. From there the grain was loaded onto lake schooners that had been towed up the canal into the basin. This unique use of the hill was devised by George Lockwood, one of the principal investors in the canal. After the decline of grain exports, the basin became an active shipbuilding center, and the last ship was built here in 1868.