Colony Farm sat three miles southwest of the state hospital on what was formerly known as the "Hind's Farm" on the southern shore of Asylum Lake, to which the institution gave its name. In 1887, the State Legislature authorized purchase of 320 acres on an elevated plateau and 40 acres of timberland. Because about 40 acres of the land were covered with large native oak trees, the site was also known as "Fair Oaks." The "cottages" constructed on the site were built of brick and housed male and female patients. There were four cottages in all, the Van Deusen, which held 35 women; the Palmer, which housed 29 women; the Pratt, occupied by 72 men; and the Mitchell, caring for 79 women. The farm produced milk, fruit and vegetables for the institution.
The output of the farms enabled the state hospital, in 1933, to maintain lower costs per patient, lowering it in 1933 to 57 cents a day. In 1942, the farms raised 100 tons of alfalfa and all the vegetables, such as sweet corn, tomatoes, string beans, peas, pumpkins, squash, beets and carrots. Fifteen thousand gallons of tomatoes alone were canned in the hospital's cannery.
By 1958, the cost of maintaining both farms began to outstrip the cost of purchasing needed foodstuffs for supplying the dwindling population of the main institution, so the farms were scaled down or eliminated.
In May of 1958, in just a few hours, the dairy herd at Colony Farm was sold at public auction and netted $32,395 for state coffers. The prize of the day went to a six-year-old milker named Kalamazoo Bessie Tobey, who had produced 14,619 pounds of milk and 540 pounds of butter in one 335-day lactation period. She sold for $630 and went to the City of David Farm in Berrien Springs, Michigan.
In 1971, Michigan State agencies were given first crack at bidding on the surplus items at the farm, and $5,000 was raised. Some of the furniture was of historical value and went to the Michigan State University Biological Center at Hickory Corners, and the Department of Military Affairs. A large number of table and chairs went to the Department of Corrections. In August of that year, dynamite and bulldozers razed the brick "cottages" and the farm faded into a warm memory.