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Founded in 1903, the area was named by shipwrecked Spaniards who supposedly saw a vision of "tres palacios" (three palaces) as they swam to shore. Fishing is the dominant industry, both sport and commercial, along with seafood processing plants. The port is home to the largest fishing fleet on the Texas Gulf Coast.
An attractive bayfront park stretches along Tres Palacios Bay offering palm trees, picnic areas and a spectacular walkway at the water's edge. Other features include three fishing piers, fishing jetties and boat ramps.