Town of Sete Cidades
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On the western part of the island you will find Sete Cidades and Vista do Rei. Sete Cidades is a small town nestled within a gigantic volcanic crater.  Vista do Rei is the overlook at the top of the mountain looking down upon the town and lakes.  The overlook was named in honor of the King of Portugal who, back in the late 1800's (when Portugal had a monarchy) came to the island and was taken to the site.   It is quite a breath taking view and as such someone came up with an idea to build a hotel where the view can be enjoyed but it didn't work out and for some time now a vacant hotel stands at the site. 
The view on a sunnier day.  The lakes take on two colors.  One green, reflecting the slopes around it.  The near one, with no slopes reflects the blue sky
From the overlook at Vista do Rei, one can see the two lakes and the town of Sete Cidades. On this particular day the clouds and fogs disrupted the view somewhat.
Some investments just don't work out!  This former five star hotel went belly up years ago at the Vista do Rei and time is taking its toll on the place.
Another view from the top.  It took a while to bike (and a bit of walking uphill) to the site from Ponta Delgada
At the entrance to the tunnel.   Apparently you can walk through the tunnel to the other side of the mountain.
Down below, with no out let, the lake levels were rising gradually.  The town would eventually be flooded out unless...a tunnel was dug leading to the ocean.
Quiet private beach anyone?
A view from the lake below.  If you look closely, you'll be able to see the hotel at the top of the hill.
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