This area was once the home of the Ancestral Puebloans for centuries before the Ute Indians made this land their territory. Miners began to make their way into the area in the 1860s but were pushed out by the Ute Indians until a treaty was made with the tribe in 1873 and they were placed on a reservation.
A town called Animas City was established in the area by miners and ranchers in 1876. It soon became a trade center and had 286 residents. It was also home to Camp Animas, which housed cavalry and infantry troops.
However, when the Denver & Rio Grande Railway was looking to build through, the company couldn’t come to an agreement with the town and chose another site a few miles to the south along the banks of the Animas River.
As the Denver & Rio Grande Railway was building westward, a group of investors General William J. Palmer, president of the railroad, along with William A. Bell and John A. Porter, formed the Durango Trust to buy and sell property and establish the townsite. Its name was chosen by Colorado’s former territorial governor A. C. Hunt, who thought the area looked similar to that of Durango, Mexico.
Durango was surveyed and platted in September 1880. Lots were offered for $50 to $100 dollars and in the first two days buyers snapped up over $15,000 in parcels. At that time, many of the businesses, including the newspaper and the bank, moved from Animas City to the new town of Durango. That year, William Bell bought 160 acres for $500 and donated land for a school and a city hall. William Palmer also donated land for the city to use. At the same time, John A. Porter began building a smelter for the New York and San Juan Mining and Smelting Company, another firm in which Palmer and Bell figured prominently. The smelter was located immediately west of the Durango townsite, on the west bank of the Animas River and at the foot of what was soon called Smelter Mountain. In addition to the smelting works, Palmer and his associates purchased a limestone quarry and several nearby coal mines. By Christmas, Durango already boasted 200 residents along with numerous houses and businesses.
A post office opened on January 3, 1881, and by April, the smelter was up and running. It was successful partially due to the coal available in the area. The Denver and Rio Grande’s line from the east arrived in Durango from Alamosa in August 1881. A huge celebration was held on August 5th and the governor arrived to participate in the ceremonies, which included a parade, a free barbecue, races, and other activities.
In the meantime, hundreds of people had arrived in the new town to work in the smelter, mines and on the railroad. Within a year of its founding Durango had a population of 2,400 and the city had already become the commercial center of the Southwest. It also became the supply point for nearby Fort Lewis, located about 2 miles to the west. By that time, the town boasted 134 businesses, including at least 20 saloons.
In the fall of 1881, tracklaying north of Durango began and in November, voters chose to move the La Plata County seat from Parrot City to Durango.
The Episcopalian Church responded first to an offer of free land from the Durango Trust to be the first church to build in town. It opened in 1881 and was quickly followed by the Methodist, Presbyterian, Baptist and Catholic churches. The same year, the Durango School District was formed.
A woman named Caroline Romney published Durango’s first newspaper using a small used printing press. The first issue of the weekly Durango Herald was produced in a tent on December 29, 1880. Romney had worked as a correspondent for the Chicago Times and was a widow by the time she made her way to Durango. In January 1881, the newspaper moved to a building on 2nd Avenue and began issuing a 7-column daily newspaper.
Romney became unpopular when she started reporting on the activities of several outlaws who formed the Stockton/Eskridge Gang who had been rustling cattle and jumping claims across the state line in New Mexico. The gang would then retreat into southwest Colorado, where they flaunted themselves as wealthy cattlemen and opened a butcher shop in Animas City. Port Stockton had even served as the Animas City marshal. After the gang murdered a man from Farmington, New Mexico, a number of Farmington cowboys rode up to Durango to get revenge for his murder in April 1881. This resulted in shots being fired between the two factions and eventually, the Stockton/Eskridge Gang was run out of town.
The Durango Herald, described as “a straight-out Republican newspaper”, purchased the Durango Record in 1882 and by the next year Caroline Romney moved on to run a newspaper in Trinidad, Colorado.
In the meantime, the Denver & Rio Grande Railroad had continued grading and tracklaying and on July 8, 1882, the first passenger train followed the tracklayers into Silverton. In that year, the “Silvery San Juan” produced $20,000,000 worth of ore. In 1885, Durango had a population of 2,254 residents while Animas City had shrunk to 83. The last rail had barely been laid in Silverton in 1882 when promoters began inviting tourists to enjoy the scenery and culture of the region.
In 1887, the Strater Hotel was built by a young man named Henry Strater, who was also a pharmacist. With help from his family, the four-story brick hotel was built at a cost of $70,000 and opened the next year. Henry Strater didn’t run the property but leased it to H.L. Rice, and under his management, the hotel soon became known as “the place” of social gathering. Strater’s occupied a small a small part of the building. Today, the Victorian Strater Hotel continues to serve guests and is a prominent downtown landmark, located just two blocks north of the Durango & Silverton Narrow Gauge Railroad.
Also occurring in 1887, was the construction of an electric power plant which delivered electricity to homes and businesses. Durango was the earliest city in the county to have electrical power. By that time, the Durango Smelter processed one million pounds of silver, lead, gold, and copper and was one of the area’s largest employers with 300 men working.
In 1889, a disastrous fire broke out in downtown, damaging several blocks along Main Avenue. Afterward, the City Council made an ordinance that new buildings must be constructed with stone and brick.
By the early 1890s, Durango was really promoting tourism. The Durango Board of Trade, a local booster organization, published a promotional brochure in 1892 touting all that Durango had to offer, suggesting that visitors could tour the smelter and coal mines, see the Indians both in Durango and out on their reservation, ride the Rio Grande Southern to a point close to the Mesa Verde Cliff Dwellings, and enjoy outdoor activities such as camping, hunting, and fishing.
The railroads also promoted the area. Combined with the Rio Grande Southern Railroad, the Denver and Rio Grande promoted the “Around the Circle Tour”, which provided a four-day 1,000-mile loop through scenic southwestern Colorado for just $28.
By this time, the town boasted four banks, two flour mills, the Durango Iron Works, two brick companies, and the smelter company reported healthy capitalizations and 2796 people in 1900.
In 1892 the St. Columba Catholic Church, school, and Mercy Hospital were started by the Sisters of Mercy. The hospital was first situated in a frame building with eight beds. A more substantial stone building replaced the first one in 1894. At that time, Mercy was the only general hospital in southwestern Colorado. Today, the church and school are still at their original site on North Main Avenue, but the Mercy Regional Hospital moved to the Grand View area of La Plata County.