In 1881 Frank and Justin Pettigrew began construction of the power dam and flour mill at this site, where portions of the foundation remain. The mill and the railroad were the nucleus of the town, which was first called St. Olaf, later called Keyes, and finally changed to Baltic. The mill produced 120 barrels of flour daily. The water wheel produced 110 horsepower, and an alternate steam engine generated another 65 horsepower. The power generated by the mill also supplied electricity to Baltic and Dell Rapids until it ceased operation in 1916. Baltic celebrated the 100th anniversary of its founding in 1981.