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The development of the hotel was financed by Laurance S. Rockefeller and it was designed by Edward Charles Bassett for the firm Skidmore, Owings and Merrill. It opened in 1965. Original plans were to use architect John Carl Warnecke and build a series of small cottages, but those plans were abandoned.
In 1925, Los Angeles architect Arthur Heineman built the first motel in San Luis Obispo, halfway between San Francisco and L.A. He coined the term motel, meaning motor hotel, and named this first property Milestone. For $1.25 a night, guests were issued a two-room bungalow with a kitchen and a private adjoining garage.