Theodore Reder created Sylvan Lake when he first stopped up the gap he found northeast of Custer. From that moment, the first Black Hills resort was born. But although Reder and his wife were at the beginning of the story, Sylvan Lake and its lodge were too great for just one family to handle.
The Reders managed their hotel until 1896, when it was sold to J.C. Spencer, originally from Wyoming. Spencer made some changes, adding a gazebo, which was built and anchored in the lake, allowing guests to paddle out into the water to enjoy dances and musical entertainment in the gazebo. Spencer's changes added to the popularity of the resort, and unlike the previous owners, he made profit at the Sylvan Lake Hotel. A campground was eventually built across the lake, as well as an icehouse to provide ice to the hotel in the summer after workers cut blocks of ice from the lake in winter. The hotel received a phone line in 1912, and a road from Hill City was built in 1913.
The year 1919 brought a new manager to the hotel: C.E Martin, and with his arrival came the first Victrola, an early phonograph, which could provide recorded music for the hotel guests. However, this was to be the final year of private ownership for the Sylvan Lake Hotel. The state of South Dakota bought the hotel for $38,000 in 1920, and 1921 brought the arrival of a new creative genius to manage the hotel. Myra K. Peters had taught music in the city of Lead previously, and she channeled her artistry into ideas for how to bring more visitors to the area. In 1923, she planned the first “Golden Dinner” at the hotel, where visitors paid $1 per plate to celebrate Custer's Pioneer Day. Her ingenuity charmed hotel guests, but extended even beyond; she is said to have tamed a wildcat that lived around the hotel, and visitors could return to their homes to tell stories of how the wildcat would even sit in Myra's lap and eat out of her hand!
Problems come with the operation of any business, but no one expected the calamity on June 30, 1935, when faulty wiring caused a fire to break out. Guests and employees evacuated the building immediately, but because of distance from town and the speed of the fire, the building was destroyed. The Custer State Park Board, in charge of making decisions regarding the hotel, decided to rebuild, and they first enlisted Frank Lloyd Wright as the architect to design the reconstruction. Landscaper Scovel Johnson proposed a new location for the building on the ridge above Sylvan Lake, and though Wright agreed to plan the new hotel, his constant delays and demands forced the board to solicit a different architect. The Spitznagle design firm from Sioux Falls won the bid, and Henry H. Hackett Construction of Rapid City was chosen as the builder. The two-story exterior alone, finished in 1938, cost $150,000, with the government providing some assistance through the Public Works Administration funds. The new hotel boasted 29 rooms (21 with individual baths since water was now available to the hotel through its own wells) on each floor, and a dining room which could hold up to 136 patrons. The first public showing of the hotel was in September of 1938, when barbecued buffalo sandwiches and coffee were served by the park board to allow people the first view inside the latest version of the Sylvan Lake Hotel.
Originally from Germany, painter Erika Lohmann created a 174-foot mural inside the dining room to keep with the American Indian themes and motifs throughout the hotel design and décor, and a stone patio was built to overlook the lake and surroundings. Though the fire had been a tragedy, the celebration kicked off a new era in the archives of the Sylvan Lake Hotel. The park board was abolished in 1941 to make way for the State Game, Fish and Parks board, which would be in charge of the park and hotel. In 1952, the hotel was appraised for a value of $2.5 million. A new wing was added in 1991, bringing the total number of rooms to 66, and today visitors can enjoy air-conditioned rooms, a restaurant, veranda, lobby, lounge, and breathtaking views of the surrounding Black Hills, along with swimming, boating, fishing, rock climbing, hiking, and snowmobiling in Custer State Park and beyond.
When Theodore Reder first saw the gap in the boulders, he may not have been able to imagine the “Crown Jewel of the Black Hills” that he would be creating. Several heads of state and celebrities have stayed at Sylvan Lake, and the area even made it onto the blockbuster “National Treasure 2.” Like so many of our national treasures in South Dakota, Sylvan Lake started with a dam inkling, but turned into an idea that has held water for 117 years.