In 1885 Alfred Grames took up residence at Oak Springs Bench at the head of Gordon Creek. Which was later to become Coal City.
In August of 1921 George Storres file a petition to establish a townsite and to develop coal properties. The town was named Great Western.
During 1922, Eugene Andreini built a stone building to serve as the office for Great Western mining. In 1925 it became the general store.
Jack Dempsey took up residence in 1923 and used the town for training. In his honor the town was renamed Dempsey City. In February of 1924 Dempsey decided not to invest in the coal industry. The citizens, upset by his decision, renamed the town Coal City.
The town began to decline during the depression, and by 1940 was just another ghost town.