The Ashley House was sold to John Warner Kinsey in 1882, who rebranded it the Kinsey Hotel. He sold the old hotel not long after, the Ashley being antiquated and badly in need of repairs to compete with its larger more modern new neighbors in town. The hotel stood empty until 1887 when it was torn down. Between 1884 and 1886, a direct railroad connection was completed to increase the Island's tourism capabilities. The first train reached Barnegat City on June 28, 1886. The lighthouse keeper's house was greatly expanded in 1889 by the Federal Lighthouse Bureau to house the head keeper, his two assistants, and their families. During the Spanish–American War, signal houses were hurriedly constructed up and down the east coast, one of which was built in Barnegat City whose staff were charged with watching the seas for signs of Spanish ships. The brief war ended, however, before the houses could be put into service.