Although the new town lacked the water needed to power water mills and manufactories, there was a waterfall in nearby Lyckeby. A Crown Mill produced flour for the bakery on Stumholmen.

The mill has been reconstructed several times, but nonetheless has managed to retain much of its original appearance. In the early eighteenth century a water-wheel designed by Christopher Polhem, was built at the lower falls of the Lyckeby river and in the 1780’s a bridge was erected over the river. Designed and built by Daniel af Thunberg, this long bridge spans over both the river and the two canals that served as a millrace for the water wheels.

In the eighteenth century several important workshops, including a Crown Smithy and a sail manufactory, were established in Lyckeby.