Texas City was developed in 1893 on a ten-thousand-acre tract that three brothers from Duluth, Minnesota, Jacob, Henry, and Benjamin F. Myers, and their partner A. B. Wolvin bought at Shoal Point, on the mainland across Galveston Bay from Galveston Island. Typical of midwestern entrepreneurs investing in town-founding and town-expansion schemes in Texas just before the Panic of 1893, the Texas City Improvement Company undertook highly capitalized infrastructure improvements to support modern economic development. It built a railroad line to connect Texas City to the main line of the Galveston, Houston and Henderson Railroad and in 1893–1894 dredged a channel through Galveston Bay deep enough to develop a port at Texas City. Like many of these midwestern development companies, the Texas City Improvement Company went bankrupt before the end of the nineteenth century.
The catastrophic Storm of 1900 closed the port, driving the reorganized development company into bankruptcy a second time. The ship channel was reopened in 1904 and a crude-oil refinery, opened in 1908, forecast Texas City's economic future. Defense-related industrialization during World War II benefited Texas City tremendously. A wide swath of territory south of downtown, facing Galveston Bay and the port, became Texas City's petrochemical and industrial district. On April 16–17, 1947, this was where the Texas City Disaster, a series of explosions and fires that began on a ship docked at the port, commenced. As a result of the explosions, 576 people were killed and more than one-fourth of the population suffered injuries. The Texas City Disaster represents the magnitude of environmental catastrophe that remains latent along the petrochemical corridor of the Houston Ship Channel. In March 2005, an explosion at the BP refinery (the third-largest refinery in the United States) killed 15 people.
In the 1950s, as happened in Port Arthur, Baytown, Pasadena, Freeport, and Port Lavaca, the center of Texas City migrated from the historic core along 6th Street westward along 9th Avenue North, a phenomenon repeated in the 1990s when Texas City's center “leapfrogged” TX 3, moving much farther west to the Gulf Freeway (I-45). The historic downtown, a once pleasant, small-town commercial corridor just six blocks from Galveston Bay, is not only deserted, it has largely evaporated. Downtown seems to have been thrown away by its residents—and locally based industries—in order to sprawl ever farther outward with architectural results that, decade by decade, are ever less consequential.
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