Built in 1860 of Florida tabby construction as the PARSON & HALES GENERAL STORE.Maj Parson was a commander of CSA volunteer coastal defenders,and the general store was used by both the Confederates and the Union as headquarters,(depending on whom occupied Cedar Key )during the War of Northern Agression.
In 1884,the upstairs was employed as a hotel,but held no official name as a hotel.
1896,was damaged by Hurricane #4,as was most of Cedar Key and Atsena Otie.
1915,Simon Feinberg bought the old general store/hotel and named it THE BAY HOTEL.After discovering that his manager had a still hidden under a false roof,Fienberg died under mysterious circumstances the next day.
During the 1930's,it was rumoured to be a house of ill repute,and after years of neglect,in 1946,new owners restored and renamed it THE ISLAND HOTEL.
...and,yes,it is said to be haunted.