In the first years after the end of the Civil War Peter Gilsey operated the successful, if small, Barnum House hotel at the northeast corner of Broadway and 20th Street. The building and land were owned by the Hess family and Gilsey held a 21-year lease on the hotel. But he had his eyes on larger things. In 1868 he purchased property nine blocks north on Broadway and began construction of his lavish French Second Empire style Gilsey House hotel. It would be the last word in mid-Victorian architectural fashion.
The Gilsey House opened in 1872 and four years later Peter Gilsey sublet the Barnum House to hotelier Edward L. Merrifield. Merrifield quickly made changes. He changed the name to the Continental Hotel, the name of a hotel he had earlier managed at No. 422 Broadway. The New York Times would later mention “He made such a success of that house that his old patrons followed him to his uptown quarters.”