The observatory was built by the California Institute of Technology in 1969 under the direction of professor Harold Zirin. Management of the observatory was transferred to the New Jersey Institute of Technology (NJIT) in 1997. Funding comes from NASA, the National Science Foundation, the United States Air Force, and other agencies. The location at Big Bear Lake is optimal due to the clarity of the sky and the presence a body of water. The lake surface is about 2,055 meters (6,742 ft) above sea level, putting it above a significant portion of the atmosphere. The main observatory building is in the open waters of the lake, and was originally reached by boat, though a causeway was added later. The water provides a cooling effect on the atmosphere surrounding the building and eliminates ground heat radiation waves that normally would cause optical aberrations.