Investors began buying up land in the valley in the early 1900s, anticipating the tourism boom. Folks from the Twin Cities, made more mobile by the automobile and desiring to escape the heat and disease of the crowded cities, were looking for recreation opportunities and summer homes. A large chunk of the Lake St. Croix Beach area was purchased by the St. Paul Daily News, now the St. Paul Pioneer Press, as a speculative investment. The newspaper offered lots in Lake St. Croix Beach for as little as $67.50, as a means to promote sales of newspaper subscriptions. By the mid-1920s a dense lakefront development of more than 100 blocks had been laid out on the property and a variety of modest cottages built on small lots.

These cottages were next to the elaborate summer home of Stillwater lumberman George H. Atwood, called The Anchorage, which he had built on a 30-acre site fronting Lake St. Croix. This property was sold in 1908 to the St. Paul Automobile Club. The Auto Club remodeled the premises as a clubhouse, which opened in 1909. According to the newspapers, the club provided guests with advantages for water sports such as motorboating, canoeing, sailing, rowing, fishing, and, of course, bathing. The Auto Club also tried to lure motorists with musicals, tennis courts and golf links. But the operation was a failure, closing after just four years due to “financial loss, inaccessibility to St. Paul pleasure seekers and the failure of Washington County to cooperate in the upkeep of roads between St. Paul and Lake St. Croix. The Automobile Club moved in 1912 to White Bear Lake, which was better served by direct rail and streetcar service from St. Paul, as well as by better roads.

In 1914 it was rumored that The Anchorage site was being considered by the Ford Motor Company for a factory site, but the factory was eventually built in St. Paul. The clubhouse probably remained to become the Lake St. Croix Beach Property Owners Association clubhouse, which for many years was used for dances.

The organization also held powerboat races, swimsuit contests, and many more events. In later years the building became the center of activities for residents.

During the depression, much of the river valley, including Lake St. Croix Beach, remained undeveloped until economic times improved, along with better roads and quicker commutes of summertime residents residing in the Cities. As years passed, the river community experienced slow but steady growth, and many small cabins from the earlier years were turned into year-around homes. The village was incorporated in 1952 and now has a population of 1,140 residents.