In 1878 construction of a new rail line was started from Oakland around the shores of San Francisco Bay, through Martinez to connect to the Central Pacific at a point three miles to the east of Ellis. The line had been built to make possible greater efficiency by avoiding hills and to eliminate the expense of helper engines. The result of the new rail line was the founding of Tracy on September 8, 1878, named for Lathrop J. Tracy, a grain merchant and railroad director in Mansfield, Ohio.
Tracy continued to grow as a railroad center. A new line through Los Banos was the fastest and least expensive to Los Angeles. In March of 1894 railroad headquarters at Lathrop were moved to Tracy. All of the railroad equipment including engines and buildings were moved. Thus, Tracy’s beginning is in fact the story of a railroad.
Businesses were initially centered on Front Street (today’s Sixth Street). After the turn of the 20th Century, commercial activity moved north on Central Avenue. As 11th Street became Highway 50, a busy thoroughfare, it fostered the creation of a number of businesses, including the historic Tracy Inn, completed in 1927. In the 1950s, businesses began locating on both sides of Central Avenue on 10th Street to complete the present downtown business district.