The Londonderrys resolved to construct a harbour one mile south of Seaham Hall at the tiny inlet of Dalden Ness as an outlet for coal from their inland pits at Rainton and Pittington. The plan was thought by many to be visionary and absurd on such a storm bound, rocky and dangerous coast, where ships often foundered. Nevertheless the 3rd Marquess laid the foundation stone of the North Dock on 28th November, 1828. Later his seven year old son laid the foundation stone of the town's first house, the Londonderry Arms (now Massimo's Restaurant and Hotel).
Harbour and railway operations were pushed forward with great vigour. On 25th July, 1831 with the North Dock and four mile railway line from Rainton sufficiently completed, the first coals ran down the incline to be loaded on to the new brig "Lord Seaham". Guns roared, the Rainton Band played, banners waved, speeches were made and 7,000 spectators cheered as she sailed out. The critics were confounded.
Town and Harbour grew together. The South Hetton mineral line was completed in 1833 and the South Dock opened in 1835. The addition of coal from Haswell (1835), North Hetton (1838), and Murton (1843) enabled the port's traffic to grow with gratifying regularity. By 1851 more than 2,000 vessels were using the Harbour now complete with lighthouse and navigational aids.
Shortage of money compelled Londonderry to abandon John Dobson's plan for a magnificent town to back the harbour with a central crescent, two large terraces of splendid sea front houses and neat dwellings behind. Instead ramshackle houses with rubble walls quarried from the dock excavations were thrown up for Harbour workers. Crowded tenements in back to back streets grew in haphazard fashion behind North Terrace where better houses and shops were to be seen. By 1831, 133 houses and 12 pubs had been completed but no churches. The spirituous took precedence over the spiritual.
From Seaham's first house, the Londonderry Arms (Massimo's) ran Seaham's first horse drawn omnibus, and from the Lord Seaham (Harbour View) the Pilot Coach left for Sunderland and South Shields as early as 1834. The only public road out of town was made in 1829 by bridging the Dene at Toll Cottage and connecting with the main road at the Mill Inn.
This Dene was soon exploited. At its seaward end salt water baths were built (1834) at its west end were the famous Adam and Eve Gardens (1830) and between was the towns first gasworks opened by Henry Wall Smith in 1845.
The Londonderrys provided land and stone for chapels, churches and schools. The Wesleyan Methodists were first in 1833 (now the Salvation Army Citadel), the United Methodists were second with their "Tabernacle" at the bottom of Church Street in 1839 and finally the Parish Church of St. John's designed by T. Prosser, was opened in 1840. It was furnished, following a three day Bazaar in Sunderland organised by the Marchioness Frances Anne, when £1,205 was raised. Four years later she used the proceeds of a book she had written, to erect a handsome stone built infirmary. Supported by subscriptions and run by a committee chaired by Vicar Angus Bethune, it served the town and visiting sailors well until 1918. Angus persuaded the Marquess to build the National School close to the Church in 1848. He was also the town's first Magistrate, the court being held in the long room of the Lord Seaham Inn from 1846 to 1861.
In 1851 Seaham was a typical waterfront town through which coal passed on it's way to market. More than 30% of the males were employed in waterborne trades. The large changing body of sailors gave ready custom to shops, hostelries and baths. Already the town had acquired a settled air with its chapels, church, school and police court. There was, as yet, little industry - just a ropery, a pottery, a timber yard and a small iron foundry.