In 1870, a father and son, Henry and Charles Lum, purchased the land for 75 cents an acre. The first structure to be built on this uninhabited oceanfront was the Biscayne House of Refuge, constructed in 1876 by the United States Life-Saving Service at approximately 72nd Street. Its purpose was to provide food, water, and a return to civilization for people who were shipwrecked. The next step in the development of the future Miami Beach was the planting of a coconut plantation along the shore in the 1880s by New Jersey entrepreneurs Ezra Osborn and Elnathan Field, but this was a failed venture. One of the investors in the project was agriculturist John S. Collins, who achieved success by buying out other partners and planting different crops, notably avocados, on the land that would later become Miami Beach. Meanwhile, across Biscayne Bay, the City of Miami was established in 1896 with the arrival of the railroad, and developed further as a port when the shipping channel of Government Cut was created in 1905, cutting off Fisher Island from the south end of the Miami Beach peninsula.
Collins' family members saw the potential in developing the beach as a resort. This effort got underway in the early years of the 20th century by the Collins/Pancoast family, the Lummus brothers (bankers from Miami), and Indianapolis entrepreneur Carl G. Fisher. Until then, the beach here was only the destination for day-trips by ferry from Miami, across the bay. By 1912, Collins and Pancoast were working together to clear the land, plant crops, supervise the construction of canals to get their avocado crop to market, and set up the Miami Beach Improvement Company. There were bath houses and food stands, but no hotel until Brown's Hotel was built in 1915 (still standing, at 112 Ocean Drive). Much of the interior land mass at that time was a tangled jungle of mangroves. Clearing it, deepening the channels and water bodies, and eliminating native growth almost everywhere in favor of land fill for development was a herculean effort.
With loans from the Lummus brothers, Collins had begun work on a 2½-mile long wooden bridge, the world's longest wooden bridge at the time, to connect the island to the mainland. When funds ran dry and construction work stalled, Indianapolis millionaire and recent Miami transplant Fisher intervened, providing the financing needed to complete the bridge the following year in return for a land swap deal. That transaction kicked off the island's first real estate boom. Fisher helped by organizing an annual speed boat regatta, and by promoting Miami Beach as an Atlantic City-style playground and winter retreat for the wealthy. By 1915, Lummus, Collins, Pancoast, and Fisher were all living in mansions on the island, three hotels and two bath houses had been erected, an aquarium built, and an 18-hole golf course landscaped.