The Hotel Grace was built in 1909 by Col. W.L. Beckham, a hotel builder and operator from Greenville, Texas. He named his newest hotel for his daughter, Grace.
At that time, the Grace was the major hotel between Fort Worth and El Paso. The Grace was conveniently located across the street from the T&P Railroad Depot, providing a first class welcome to weary travellers. Originally built with three stories, the hotel added a fourth story in the mid-1920s during one of Abilene's biggest boom times. The additions included the rooftop dance floor and a kitchen. The next major renovation was in the 1940s, and the name was changed to the Drake Hotel.
During the 1950s and 1960s the hotel declined in quality along with the decline of the railroad as a significant part of Abilene's economy. In 1973 the hotel closed with the failure of its fifty year old boiler. The Abilene Preservation League saved the building from demolition in 1986.
The building was always used as a hotel. The commercial tenants of the building included a barbershop, a basement recreation club (a pool hall), a bus station, and a Western Union office. The Grace Coffee Shop was a favorite downtown restaurant where Abilenians met to discuss the events of this growing West Texas town.
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