The City of Key West declared bankruptcy in 1934. The Works Progress Administration (WPA) and Florida's Federal Emergency Relief Administration (FERA) were tasked with restructuring the local economy from a dying industry town into a vacation paradise. In 1937, this building became the first gallery to exhibit artwork to the public in Key West and promote a community of artists. Reproductions of art depicting the Keys was used to enticed visitors and launch a tourism based economy for the struggling city.
Building # 1 is the oldest brick structure in Key West built by the U.S. Navy as a Coal Depot and Storehouse. It coordinated refueling steamships and was a vital source of coal from 1856 â€“ 1900. During the Civil War, the Unionâ€™s West Indies Blockade Squadron was headquartered here. The blockade shortened the war and saved many lives on both sides of the conflict. In 1932 the 7th Lighthouse District occupied the structure. In 1939, the building became the U.S .Coast Guard Headquarters.