Records aren’t clear about when the Commercial Hotel was built, but it was most likely in the late 1880s or early 1890s. It was probably owned by the D&IR Railroad, as its manager, N. McPhee, was described as “one of the most competent and popular hotel men on the D&IR.” Once the largest hotel in town (found at First Avenue and Sixth Street), the Commercial stood three stories high and held twenty-two rooms. It catered to businessmen and hunting and fishing parties, and its dining facilities could seat fifty. Fire destroyed it in 1918.
The Federal Writer’s Project of the 1930s recorded aging lumberman Dell Chase of Cornell, Wisconsin. Mr. Chase, who worked the woods twenty miles northeast of Two Harbors for a man named McPherson, told this tale of the Commercial:
Mr. McPherson bought four fine horses at a sales stable in Duluth. He chose me out of forty men to go to Duluth and bring them in. So back over the forty-one miles [to Duluth] I went all alone. I got a train out of Two Harbors at 11 p.m. Friday and arrived in Duluth at 12:30 the next morning, twenty long, hard hours. The next morning I started for camp; had dinner at Knife River and spent the night at Two Harbors. There I saw a horrible fight. I saw the most feared man in the state—‘Kill-Dee’ was his name. He picked a fight with a Mr. Roch of Chicago Bay. Kill-Dee was an outlaw, well known in that part of the country. In this case he had borrowed ten dollars from Roch about two hours before and came back to get more, and so the trouble started. I was standing at the end of the bar in the Commercial Hotel, sipping a cold glass of beer after my two long, hard days. Roch stalled off as long as possible and then the fight was on. Up and down and over and around the bar and Kill-Dee reaching for his guns which he finally got. Tried twice for the kill but failed each time. Roch, a very skillful man, got the gun. He knew it was now or never, so he finished the job with a bullet between the eyes of Kill-Dee. The first shot Roch fired went over the bar among the bottles, the second went through the floor and lodged near the hip of a girl on the second floor. The third got the villain right between the eyes.