Peter Demens: Building Railroads is Hard, Part 2

In the first part of this series (found here) things were going fairly well for Peter Demens. He operated a successful lumber mill, was a large building contractor in Florida, and he had just acquired the Orange Belt Railroad. He then lured in a couple partners he convinced to invest in the fledgling railroad. The Orange Belt acquired a bit of capital from investors, an old narrow-gauge locomotive, and took the rails from Longwood to Oakland, which is near Lake Apopka. The run was 35 miles, and was completed in October of 1886. In a landslide, he was elected first mayor of Oakland in 1887. He wanted to rename the town St. Petersburg, but was rebuffed.

Orange Belt Train in the Florida Wilderness

Classic Business Blunder: Underfunded Expansion

Demens with orange belt locomotive
Demens in this rare photo standing at the far right. And how about those antlers on the train’s light?

So with all the great stuff going on, you would think the little railroad was set to expand. Demens and his partners revised the firm’s charter after the successful line to Oakland, with sights set a run to the West Coast. And here is where things start to get a bit tense. Demens and his partners spent quite a lot of money on the rail line, with the money coming from northern investors in New York and Philadelphia.

And, well, you know those guys kind of wanted to get their money back, with interest no less. However the Orange Belt couldn’t pay them back in short order; the railroad was burning through cash and needed even more. Railroads were often given land that would rise in value along the route (such as with Oakland) and some cash, but these little towns weren’t wealthy. The land was the lure, but the property took time to increase in value and then needed to attract buyers. That doesn’t happen overnight! Creditors started hounding Demens and his partners. One of the partners, an unfortunate Canadian guy received a note that Orange Belt trains were being chained to the tracks by anxious investors who wanted their money back. He had a stroke and died on the spot. Ugh! So Demens did what any driven fledgling tycoon would do, he started looking for new money to pay back the old.

Enter Hamilton Disston

Hamilton Disston was the godfather of Florida land. We won’t explore him here, but in short he owned vast swaths of central Florida acreage in a deal he made with the state to improve the land and found towns. In a business-saving deal, Disston agreed to give Demens land all along the route and into the Pinellas Peninsula if Demens would agree to terminate the train in Disston City, which is now the small town of Gulfport. Disston had incorporated the little town and others. He knew the importance of the train and how it would affect growth. While Disston didn’t supply money, Demens was able to use the contract with Disston to return to investors in the north to secure an additional $700,000 via bond issue which gave him a lifeline to keep developing. By January of 1888, Demens had built the rails and and stations along the route to Tarpon Springs (Sutherland at the time).

So interesting fact — Demens loved his Russian architecture, and this is why the stations along the line including the first station in St. Petersburg were all built in traditional Russian style. Take a look, comrade!

That Cash Though – And Disston Gets Snubbed

So the $700,000 in new money was just barely enough to cover the building and labor costs of the little railroad. The same problems (or you might call them investors) came back to haunt Demens, who knew he could only secure more cash with additional land grants. So he went back to Disston and presented a plan to run the railroad right through Gulfport but across a trestle to Mullet Key (Ft. De Soto) and create a large port there. For that, Demens wanted an addition 50,000 acres of land from Disston that he could use as collateral for loans. Disston said sorry, the plan was to aggressive.

But Demens knew the railroad was done if he couldn’t secure more financing and he was in a tight spot. So enter the rather abrasive businessman John Williams who had over the course of a couple years purchased thousands of acres around a little hamlet know at the time as Wardsville. The spot at the time was really just a crossroads, a small collection of shacks and a general store which was operated by – surprise – the Ward family.

Bet you didn’t think I could find a pic of Wardsville. I did.

All Aboard to St. Pete

John Williams (who we will save in large part for another day) had his vision set on forming a real town in the rugged little outpost where St. Pete is today. The best way to ensure a town’s success was of course to get a train there. He was able to offer Demens sufficient land to bring the Orange Belt to Tampa Bay through his own land holdings. But here’s the thing. These guys were business people, and they weren’t best friends. But that said, the deal was struck and the little rickety railroad bypassed Disston City and instead arrived at the shores of Tampa Bay in November of 1888. Success!? Sorry, no. Here come the nails in the coffin.

Williams had a stipulation that the Orange Belt had to build a railroad pier to 12′ deep water, and in the inspection Williams rejected the pier for not being long enough causing a months-long delay. Williams also had inserted a stipulation in the contract that no land could be sold that had been granted without both parties agreeing to any sale for a period of time. In a fairly back-stabbish move Williams wouldn’t let Demens sell any of the land he had acquired in the deal. I would note here that Williams was not the nicest person, in fact, he might have been called a number of unpleasant things, but we will explore that in a future post. Let’s leave it at “shrewd” for now.

Demens did finally get his opportunity to name a town St. Petersburg, and perhaps appropriately it was the last town in the Orange Belt line. There are a number of stories as to how the town got its name, from coin flip to happenstance, and the truth is unclear. But the coin flip, which probably wasn’t the actual way St. Pete got named, is a friendly story that people like to repeat. So we’ll go with it. Williams’ town is ironically called St. Petersburg, named by Demens, and Demens’ hotel that he built for railroad workers was named The Detroit after Williams’ hometown. Maybe they were both trying to irritate the other. I call that the real 50-50 chance.

Adios to the Orange Belt

It was the money that did in the Orange Belt in and that pushed Demens out. With creditors demanding repayment, the situation was untenable for Demens. He decided to take a buyout in part from partners, and in May of 1889 one of his previous partners, Edward Stotesbury became the new president of the company. Demens got out while he could, before the foreclosure on the railroad occurred a couple years later in 1892.

This might be a tad exaggerated. You decide.

Plant Takes Over

Everything kept going wrong for the Orange Belt, and even the partners who bought Demens out couldn’t hold onto the the line. Within a couple years the Orange Belt became part of the immensely successful Plant System, owned by transportation tycoon Henry Plant. Having already built the extremely successful railroad to Tampa and many other places, Plant, a legit train magnate, quickly modernized the narrow gauge Orange Belt, renamed the Sanford – St. Petersburg line, which added to his own fortune and removed competition in a crowded Florida train industry. Plant also owned steamships and was able to transport people and goods to remote places with the land & sea connections.

Demens Exits Florida

Those few brief years of building the Orange Belt line to St. Pete had to be some of the worst in his life for Demens. The business was always close to failure due to cash flow and other problems for those few years. It must have been odd for him to have been so successful then see everything virtually collapse. Lesson learned — don’t under-fund your railroad! But it wasn’t the end for Demens, just a bad chapter. His story improved dramatically.

Demens took his buyout from the Orange Belt and moved north to Asheville, NC where he once again regained success helping the town grow with the immense opportunity provided by George Vanderbilt during the Biltmore construction along with the area’s growth that surrounded it. He built a number of prominent buildings in Asheville and for Vanderbilt.

Demens built this Courthouse in Asheville.

After a few years in Asheville Demens moved to California where he purchased significant land holdings and started his own orange groves. He also became a writer appealing to a significant Russian expat audience. He finally passed away in 1919 in California, never having returned to St. Pete.

Author’s Thoughts

I enjoyed writing this bit about Demens, and I think this story repeats a common theme I see in Florida development. A large number of the early founders of Florida, Pinellas, and St. Pete paid at a heavy toll for their activities as they swung for the stars and tried for vast fortunes. These people were smart and focused but yet many still failed. I’d also like to point out that we hear about Demens and Williams in many topical stories as if they were buddies hopping off a boat and declaring success in the Pinellas wilderness, but this wasn’t so. Money, deals, backstabbing, and exploitation coupled with immense risk was more the norm in all these stories. I certainly don’t want to imply that Demens wasn’t to be admired; he was. He worked hard, and in the end this business wasn’t a success but not for lack of trying. Although not the ending Demens had hoped for, the failed business still brought commerce and success all along the route, the greatest of those successes being the perhaps aptly named St. Petersburg.

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