Peter Matts first purchased land in what is now known as Paoli in 1846. His first building was a sawmill in 1847. He platted the growing village in 1856 and named it Paoli after a town near his Pennsylvania birthplace. Peter Matts worked on the first capital building in Madison and also served 2 terms as the sheriff of Dane County. The one room schoolhouse was built in 1854. A second room was added around the turn of the century. By the mid-1870s, Paoli boasted a bustling gristmill, a cheese factory, two hotels, a couple of churches, a school, a saloon, a dance hall, a doctor, and several tradesmen.

It was last used as a school in 1972 by the Belleville School District. Bill Hastings purchased the schoolhouse in 1990. The building was turned into shops after it was renovated in 1998. In 1999 the current owner, Debbie Schwartz, rented a space in the schoolhouse for her shop “The Cottage Gardens”. She purchased the schoolhouse in 2003. The Schoolhouse Shops & Cafe made its debut in 2008. and has grown from sandwiches at lunch to dinner and live music as well. Many renovations have been made, however the original building and much of its interior remains in place.

A stroll through this historic Sugar River town takes you past stone buildings constructed before the Civil War, with shops offering work by contemporary artisans. Today, as you walk the same paths they did, you’ll shop all along the street for fine arts and crafts at affordable prices in a friendly and relaxed atmosphere. Perhaps you’ll stop by for a superbly prepared luncheon, pause to purchase fresh cheese curds or just quaff a cold brew at the local pub. Among your fellow travelers, you’ll find cyclists (Paoli is one of Madison’s most popular biking destinations), canoeists, horseback riders, car clubs, history buffs, and shoppers all contributing to this interesting blend of character and culture.