King Richard I, returned from captivity in Austria, had set about summoning a fleet and an army to Portsmouth, Hampshire, which Richard had taken over from John of Gisors.

The King on May 2, 1194, had given Portsmouth, strategically located on the English Channel, its first Royal Charter granting permission for the borough to hold a fifteen day annual "Free Market Fair", weekly markets, to set up a local court to deal with minor matters, and exemption from paying the annual tax, with the money instead used for local matters.

King Richard later had gone on to build a number of houses and a hall in Portsmouth.

The hall is thought to have been at the current location of the Clarence Barracks (the area was previously known as Kingshall Green).

Some believe that the crescent and eight-point star found on the thirteenth century common seal of the borough was derived from the arms of William de Longchamp, Lord Chancellor to Richard I at the time of the granting of the charter but it is actually the granting by Richard of the arms of the defeated Isaac Komnenos of Cyprus, who had held Richard's fiancee and sister captive; he had conquered Cyprus as a result, in the Third Crusade.

His awarding of the arms could possibly reflect a significant involvement of Portsmouth soldiers, sailors or vessels in that operation.

The crescent and star, in gold on a blue shield, were subsequently recorded by the College of Arms as the coat of arms of the borough.

King John had in 1200 reaffirmed the rights and privileges awarded by Richard.

John's desire to invade Normandy results in the establishment of Portsmouth as a permanent naval base, and soon afterward construction begins on the first docks, and the Hospital of St. Nicholas, which performs its duties as an almshouse and hospice.