Circa 1855, William Hill established a fishery at this place, which was called The Cove. He had five fishing boats and a lodging house. The settlement became the village of Alcona. In the 1860s and 1870s, Johnston, Haynes & Company built a sawmill here with a railroad for transporting logs from the west, eventually from as far as present day Lost Lake Woods. By the early 1880s, the community included three general stores, three hotels, a lumber dock and a passenger dock. The 1000 residents made it the largest community in the Huron Shore region. In 1893, the sawmill was destroyed by fire. It was not rebuilt and residents began to leave to seek other employment. By 1903 it had become a "ghost town."
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