Built in 1912 by Alsatian immigrant and prominent local developer Emil Schmidt, the City Hotel provided public lodging previously unavailable to visitors to LaCoste. Near the railroad depot, it served the growing number of visitors and business people connected with sales, railroad expansion, and the building of a dam in northeastern Medina County. Its elegantly furnished rooms, verandas, and restaurant, together with a ready clientele, made the hotel and restaurant an immediate success. In 1928, during National Prohibition, Gus and Maggie (Ma) Keller bought the property and operated a saloon in the hotel known as “Kellers Place,” which local tradition held allowed patrons to gamble and drink in a back room while timely telephone calls helped avoid police detection. Maggie managed the saloon for almost four decades and became the subject of local legend. The saloon was especially known for the large number of bottle caps covering its walls and ceiling, and the hotel became a local landmark recognized by generations of people traveling through or visiting LaCoste.