During the Six-Day War in 1967, the canal was closed, leaving 15 ships trapped in the lake until 1975. These ships became known as the " Yellow Fleet ", because of the desert sands which soon covered their decks.    The crews of the ships would eventually organize, share resources, and later set up their own post office and stamp. Two German-flagged ships eventually sailed out of the canal on their own power. Stranded cargo included various perishables (like eggs and fruit), T-shirts, and a load of toys destined for Woolworth's . 
During the 1880s, as Seattle's Elliott Bay waterfront grew crowded, industry began to develop on the Lake Union shoreline. In 1882, Luther M. Roberts, Thomas Hood, Nicholas Davidson, and Isaac A. Palmer formed the Lake Union Lumber & Manufacturing Company and opened a sawmill on the southern end of the lake, near the current intersection of Valley Street and Westlake Avenue. This location was then on the lakeshore, which has since been filled to the north with sawdust and other refuse from the mill and fill dirt from other parts of Seattle. It was, according to Clarence Bagley, the first mill to locate outside the Elliott Bay shore in the downtown area. Others followed, with an early mills located at Fremont and Brooklyn.