Potter Palmer was the central figure in the development of downtown Chicago real estate in the 19th Century and was the principal designer of State Street in old Chicago. He was born on May 26,1826 near Albany, New York. When he was 26, Palmer founded a dry goods store on Lake Street in Chicago called Potter Palmer and Company.
Like many successful Chicago retailers, he looked for ways to put the customer first and in his case, that meant the innovation of a "no questions asked" return policy. If a customer was not satisfied for any reason with a product, he or she could return it to the store for a credit or refund. That may be common retail practice today but it was certainly not in the 1850s. Palmer tried particularly hard to cater to women customers, also an innovation for that time.
Palmer ran the best dry goods store in Chicago until 1865. His doctor advised a less stressful business for his health and Palmer brought in Marshall Field and Levi Leiter as partners to help manage the work load. The company became Field, Leiter, and Palmer for two years until 1867 at which time Palmer sold his interest to Field and Leiter so that he could be free of daily management duties and concentrate on real estate investments. He leased a new store at State and Washington to his former partners in 1868 and Marshall Field eventually put the company under his sole name and it remained one the of leading regional retailers until the name disappeared in September 2006 when the Macy's brand of New York took over the Marshall Field brand. The Field family had disappeared from management of the store about forty years before.
Potter Palmer built several major buildings on State Street in the late 1860s and early 1870s. His crown jewel was the first hotel that Potter Palmer built opened on Sept. 26, 1871. The new hotel was called "The Palmer" and was luxuriant for its time. The opening was intended to honor his new bride, Bertha Honore Palmer. But less that two weeks after the hotel opened, it was burned to the ground in the Great Chicago Fire of Oct. 8-9, 1871. Palmer lost about 32 other buildings to the fire as well. Palmer obtained what was believed to be the largest personal loan ever made up to that time from a bank to an individual. He borrowed $1.7 million and started to rebuild right away. A second even grander hotel, The Palmer House, was built on the same spot at State and Monroe and was completed in 1875.
All the great celebrities of the 19th Century who came to Chicago usually stayed at the Palmer House. Some of the famous visitors included actress Sarah Bernhardt, humorist Mark Twain, author Charles Dickens, Ulyses S. Grant, Grover Cleveland, James Garfield, and William McKinley.
Fifty years after the second Palmer House of 1875 was built, a new hotel was needed. The old Palmer House was limited to seven stories. By the middle 1920s, a third Palmer House was built in stages on the same lot at State and Monroe between 1924 to 1927 so the hotel could stay open during the rennovation. This last hotel, still standing, was designed by Holabird and Roche and was raised from seven to 25 stories. It vied for bragging rights in scale with the nearby Stevens Hotel at 740 S. Michigan. Eventually in 1950s, Conrad Hilton bought both hotels.
In 1885, Potter Palmer single-handedly changed the focus of rich and social Chicagoans from the pretige residences of South Prairie Avenue to Lake Shore Drive where Palmer built a mansion for his wife at 1350 N. Lake Shore Drive. Bertha Honore Palmer ruled Chicago society from that castle and became a primary contributor to the Chicago Art Institute. The works of Renoir and other French impressionists were her passion. The mansion was still there in the 1920s when Mrs. Potter Palmer II set the standards in Chicago society.
In addition to dozens of buildings on State Street, Palmer's legacy for Chicago was reclaiming swamp land on the north shore for development and making the beautiful Lake Shore Drive area a fashionable address. Like his wife Bertha, Palmer was known for many philathropic works.
Potter Palmer died on May 4, 1902 in Chicago. He and Bertha Honore, who died in 1918, are both buried at Graceland Cemetery.