World’s first motel is up for sale in SLO. See the historic property

A San Luis Obispo property said to be home to the world’s first motel is up for sale “for the first time in a generation.”

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Hayes Commercial Group has officially listed the 4.21-acre site just off Highway 101 at 2223 Monterey St., according to a news release.

The 100-year-old property was listed without a public asking price.

“There is no comparable opportunity in California,” listing broker Nolan Tooley said in the release. “This is a shovel-ready, entitled hotel site on Highway 101 in one of the most supply-constrained lodging markets on the Central Coast.”

He continued: “It also happens to be the birthplace of the American motel, giving a developer the unique chance to continue a story that started 100 years ago.”

According to the release, the site was originally home to the Milestone Motel — sometimes stylized as the Milestone Mo-Tel or Milestone Inn, before later being dubbed the Motel Inn — which opened in Dec. 12, 1925, by Pasadena architect Arthur S. Heineman.

It was the first property anywhere in the world to use the word “motel” — a mashup of motor hotel — that Heineman allegedly came up with to describe his concept of a roadside hotel where guests would drive directly to their room door.

According to the release, Heineman chose San Luis Obispo for the location because it sat roughly halfway between Los Angeles and San Francisco — a full day’s drive in 1925.

With its iconic Mission-style bell tower, the property would later become a hot destination for Hollywood movies stars traveling through the area.

That included Marilyn Monroe and Joe DiMaggio, who stopped for lunch in 1954 after spending their honeymoon night in Paso Robles.

In 1983, the motel was included in the city’s list of historically significant properties, but over the following decades, the business would shutter and much of its original structures would be demolished due to “extensive deterioration.”

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Today all that is left is the facade of the original restaurant, and refurbished portions of the lobby building including the three-tiered bell tower with a copper dome.

Could new hotel be coming to long abandoned site?

The hotel closed permanently in 1991 and has sat vacant since, despite ongoing pushes to revitalize the property.

A proposal to build a new hotel there was approved in 2017 — but for years the project lingered in development.

Then in 2023, the city Planning Commission approved a revised project design to transform the property into an 83-room hotel with 27 bungalow guest room buildings, a pool area and a new sound wall.

At the time it was said the project could begin construction within the year — but instead, once it again it lingered without shovels ever lifting on the property.

According to the recent listing, the previous project entitlements are all still in place and construction permits are ready to issue, meaning the new buyer would be able to jump into the project quickly.

The property is also zoned to allow for mixed-use residential, senior living and boutique resort concepts, the release said.

Because the motel structure on the property is on the City’s Master List of Historic Resources, however, any alternative future development at the site must incorporate the structure into its plan.

This story was originally published July 30, 2026 at 5:00 AM with the headline “World’s first motel is up for sale in SLO. See the historic property.”

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