The company was in such debt, in fact, that in August 1833 they were forced to sell the resort and grounds at what must have been a painful loss. So, who could afford to buy a resort hotel that a group of the wealthiest men in Wilmington could not afford to keep? One of the richest men in Philadelphia, that's who. His name was Matthew Newkirk, and he was quite familiar with, and fond of, Brandywine Springs, after having spent several summers at the resort. Newkirk was said to be the largest landowner in Philadelphia, as well as owning property in 11 states. Among other things, he was a director of the United States Bank, and a few years later would be one of the founders of the Philadelphia, Washington, and Baltimore Railroad (PW&B), as well as its first president. After purchasing The Springs, Newkirk wasted no time in further upgrading the already beautiful property.
Immediately, Newkirk hired the preeminent architect in the country at the time, Thomas U. Walter, to redesign and remodel the facilities. Walter, who would later design the dome and north and south wings of the US Capitol, enlarged the hotel, and gave it more of a neo-classical appearance. This, though, was just the beginning. Several of the most noticeable upgrades had to do with, appropriately enough, water. Newkirk insisted that the hotel have running water (still uncommon at the time), so a pumphouse was built down near Hyde Run to pump water uphill to the hotel. This water fed not only the hotel, but also several large fountains, as well as hot and cold baths in a new bathhouse adjacent to the hotel. Landscaping was done all over the grounds, including a new linden-lined entrance road from the turnpike. (Here is a description of the grounds from 1839, after Newkirk's renovations.) All this can be seen in the picture above. Newport Gap Pike is in the foreground, the Yarnall Tavern is in the lower left, and the pumphouse is on the right.
Unfortunately for Newkirk and his hotel, the good times would not last. The Panic of 1837, one of the first great financial downturns in the US, sent the hotel on a downward spiral from which it would never really recover. Many of the wealthy guests who patronized Brandywine Springs suffered greatly in the late 1830's, losing much of the extra wealth once spent on summer retreats. Newkirk continued to lease the hotel to experienced managers and spend the summers at his cottage, but business continued to decline. (He even agreed to sell alcohol at the hotel, which being a strong temperance advocate, he had not done previously.) The Railroad Era was in full swing, partially due to Newkirk himself, but the increase in mobility tended to hurt resorts like Brandywine Springs. Trains made it easier for folks to vacation at seaside and mountain resorts, and although Newkirk's own PW&B line ran nearby (the current Amtrak line south of Stanton), it didn't help the hotel. The Wilmington & Western Railroad, which would help to usher in the second great era at Brandywine Springs, would not be laid down until 1872.
By 1853, business was so bad at the hotel that Newkirk decided to take up an offer to change it entirely. That year, he leased the property to Captain Alden Partridge, who set up there the National Military School at Brandywine Springs. Captain Partridge thought it was a perfect location for a military school, with open grounds for drills, large ballrooms that could easily be converted to classrooms, and of course plenty of lodging for the cadets. The school opened in May 1853, but by Christmas it would be up in smoke -- literally. On the evening of December 9, 1853, while the students were away on holiday break, a fire broke out in an upstairs room, eventually destroying the entire building.
Thus ended the first great era at Brandywine Springs. The grand hotel was gone, and Newkirk quickly sold the property. The next owner to move in, another Philadephian named Peter Coyle, decided not to rebuild Justa Justis and Thomas Walter's large hotel. Instead, Coyle combined Newkirk's three cottages into one structure, and opened a smaller hotel. And although this venture would be no more successful than the last (partly owing to the outbreak of the Civil War and loss of the Southern clientele), Coyle's smaller hotel would eventually be the nucleus around which the next chapter in Brandywine Springs' story would grow -- the amusement park.