On May 24, 1870, Washington Territory selects the future Loyal Heights neighborhood of Seattle for school land. Loyal Heights is located in northwest Seattle, north of Ballard, on land that goes down to Shilshole Bay. In 1853, when the Federal Government established Washington Territory, it allowed the territory to retain two square miles out of each township (36 square miles) to be used for school purposes. In the township between Denny Way and NW 85th Street (including Magnolia, Ballard, and portions of Queen Anne and Loyal Heights), the sections usually allotted to the territory (sections 16 and 36) were found mostly under Puget Sound. In 1870, to make up for this deficiency, the territory chose for school land 527 acres in sections 1 and 2, which included the future site of the Loyal Heights retail district.
The earliest record of Euro-Americans to explore this area was in August and September 1855. William Strickler was hired by the U.S. Office of the Surveyor General to survey a township of land they designated as Township 25 North Range 3 East. Prior to the U.S. opening land for homesteading, the Federal Government required that it was surveyed. Strickler's crew included a compassman, two chainmen, and an axeman.
On October 1, 1855, they surveyed west along the future NW 85th Street from about 16th Avenue NW. From 22nd to 29th avenues NW, cedars from 2.5 feet to at least 4 feet in diameter were noted. At about 31st Avenue NW, the surveyors left a mile-wide burnt area, apparently the remains of a forest fire. They described the soil as second rate and the fir and cedar trees as "mostly dead." They did not note undergrowth: Apparently the forest fire had occurred recently. Strickler completed and submitted the survey on January 11, 1855.
In January 1888, William Williams applied to homestead the territorial school land. The U.S. Land Office refused the application. He apparently appealed the decision challenging the territory's right to select this land for school purposes, and lost. During the next five years there were at least 11 more unsuccessful attempts to homestead this land.