The land around Lake Washington to the east of Seattle was first settled by Native Americans. English settlers arrived in the late 1860s, when the McGregor and Popham families built homesteads in what is now the Houghton neighborhood. Four miles (6 km) to the north people also settled near what is now called Juanita Bay, a favored campsite of the Natives because a wild potato, “wapatos“, thrived there. The Curtis family arrived in the area in the 1870s, followed by the French family in 1872. The Forbes family homesteaded what is now Juanita Beach Park in 1876, and settled on Rose Hill in 1877. Gradually, additional people settled in the area, and by the end of the 1880s a small number of logging, farming and boat-building communities were established.

Kirkland Land and Development Company, Kirk and Hunt purchased thousands of acres of land in what is now Kirkland’s downtown in July 1888. Kirk and his associates started the construction of a new steel mill soon after, named the Moss Bay Iron and Steel Company of America. After founding the city of Kirkland in 1888, officially one of the earliest on the Eastside at the time, Kirk’s vision of a “Pittsburgh of the West” was beginning to take form. Construction soon commenced on several substantial brick homes and business blocks that would house and serve the steel mill employees.

However, the Seattle, Lake Shore and Eastern Railway, which had recently been purchased by Tacoma-based Northern Pacific, had now refused to construct a rail line to the lake. This would, after all, have a negative impact on Tacoma, which was furiously competing with Seattle as the dominant Puget Sound seaport. The ensuing financial issues and numerous obstacles took a toll on Kirk, who was running out of investors. Hunt was also in debt from the purchase of land.