Wednesday December 22, 1982 was a cold day with temperatures in the 30's and a westerly wind of 10 mph.. With it only three days before Christmas it would be the worst time to experience a major fire. The fire was discovered by a tenant, Oscar Hernandez, who was returning from work. As he made his way to his third floor apartment he noticed smoke seeping from around a door frame of another apartment. He immediately began knocking on the door and heard the occupant of the apartment coughing. He attempted to aid the semi-conscious man from the room but could not do it alone. He ran back down alerting others and asked one to have the landlady to call the fire department. He and another tenant, Ralph Smith returned to the third floor and removed the man, Jack Tyler whose apartment was on fire. He was transported to the Westerly Hospital by Westerly Ambulance and treated for smoke inhalation.

At approximately 3:37 pm a phone call was received at the Westerly Fire Station of a possible fire at the Riverside Inn at 205 Main St. A group of men were in the firehouse at the time and Chief Robert Mackay responded with Engine 3 and Ladder 1. Upon arrival Chief Mackay had a serious fire in the building so he pulled Box 1133. The 1 inch booster line and the 1 1/2 inch preconnected hose line were stretched into the building. via the front stairs. Firefighters arrived on the second floor landing to find heavy fire and smoke pushing at them. They were driven back. Fire was now extending from the third floor into the attic and down into the second floor in the rear of the structure. Engine 1 arrived and assisted in bring more hose lines into the building as Engine 2 laid supply lines from the hydrant Main St and Cross St. Ladder 1 was placed in the driveway with its front wheels on the river wall. Access was not available from the front due to the utility lines nor the rear as the back side of the building faced the river. Ladder 1's aerial ladder was used to attack the fire in the rear rooms as well as the roof. As nightfall came temperatures began dropping and water spray began to leave a film of ice on the road way. Some hoses also began to freeze. The fire was brought under control by sixty firefighters after a two hour battle.

Chief Mackay reported heavy fire damage to the third floor and roof as well as significant water and smoke damage to the lower floors. A portion of the roof in the rear collapsed into the third floor. 18 tenants including several children were left homeless by the fire. Subsequent investigation by the Rhode Island State Fire Marshal's office determined carelessly discarded smoking materials were the cause of the fire. Although the building was insured, the tenants themselves did not carry insurance on their belongings. The Red Cross assisted many of the tenants in finding temporary housing as well as providing vouchers for necessities Westerly Building Inspector Morton Koske posted the building as unfit for habitation. Owner Udo Schwarz would later decide to raze the building. The razing was completed on January 3, 1983.