 In 1937, the property was deeded to the City of Carmel-by-the-Sea in order to qualify for federal funding and, in 1939, the site became a WPA project.The WPA rebuilt the outdoor theatre and created an indoor facility beneath the outdoor stage, the site re-opened as "The Carmel Shakespeare Festival", with Herbert Heron as its Director, and, with the exception of the World War II years of 1943–44, the festival continued through the late-1940s.In 1949, Heron and twenty villagers started the first Forest Theater Guild.