Most of the time, drink sales determined which bands would return. During the early 1970s, the upstairs featured mostly "retreads" and "has-been" acts, with the occasional group on the rise. It brought bands like Downchild Blues Band (which became the club's house band), as well as Buddy Guy, Muddy Waters and many others, "up the street" and paid them a regular fee to perform. Under the pair's ownership, the "El Mo" became a youth-oriented blues and rock music venue. The business and building were bought in 1972 by Michael Baird and restaurateur Tom Kristenbrun, who also owned the Jarvis House.
By the time Schuy died in 1971, striptease was being featured on the main floor. A German dance club, Deutsches Tanz Lokal, frequently rented the second floor during this period. By the 1960s, Adam Schuy owned the venue which, by then, featured music appealing to Toronto's Hungarian, Irish, and Portuguese communities. In later configurations of the establishment, musical acts appeared on separate stages located on the main and second floor of the building. Live music was not permitted until July 1948, when the Liquor Licence Board of Ontario reversed an earlier ban. In the club's original incarnation, which officially opened on March 23, 1948, the main floor was converted into a dining hall with a dance floor on the second floor that featured Latin music. The establishment's name and iconic neon palm sign were inspired by a San Francisco nightclub.
With the passage of the Liquor Licence Act of 1946, which allowed the sale of liquor in taverns and restaurants in the province for the first time since World War I, restaurateurs Joseph Brown and John Lang decided to apply for one of Toronto's first liquor licences and convert their property at 464 Spadina into one of the city's first cocktail bars. The current building was built in 1910 and housed a dry goods store, a barbershop, and restaurants in its first three decades. Apocryphally, the original building at 462 Spadina had been a music venue since 1850 and was first used as a haven for escaped slaves.
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