In 1849, Cave Johnson Couts, a brash twenty-eight year old lieutenant in the U.S. Army dragoons, arrived in San Diego. His unit was charged with providing protection for the Boundary Commission, which would shortly establish a U.S.-Mexican border from Texas to the Pacific Coast.
Couts began construction on the Colorado House in 1850, amid controversy that he had obtained the property illegally. Built in 1851, the two-story hotel had a first-floor veranda and square-shaped false front. Couts added a “spacious and airy dining saloon” and installed a billiard table.
In 1851, he married Ysidora Bandini, the daughter of his friend, Juan Bandini. Among the many wedding gifts was title to a 2,219 acre tract of land near San Luis Rey, where Couts would build the family residence, Rancho Guajome.
Preoccupied with his rancho, Couts lost interest in the Colorado House and leased it in 1854. Over the next 12 years, the building was renovated and subdivided to provide office space for the San Diego Herald, a surgeon, jeweler, hairdresser and other businesses. Couts sold the property to Joseph Mannasse and Marcus Schiller in 1866 – the same year he was found not guilty for shooting Juan Mendoza, a former ranch employee, on the plaza outside the Colorado House.
The building burned in the 1872 fire. Reconstructed in 1992, it now houses the Wells Fargo History Museum.