In the late 1800s, phosphate rock was discovered on the banks of the Peace River southwest of Arcadia. Shortly after, the Peace River Phosphate Company and other companies began phosphate mining operations in the area. The Peace River Phosphate Company built a narrow-gauge railroad along the banks of the river between Arcadia and Liverpool, just south of Fort Ogden. The phosphate industry led to Liverpool quickly becoming a phosphate mining town. A dock on the Peace River in Liverpool allowed for loading phosphate from rail cars on to barges for shipping.
In Arcadia, the Peace River Phosphate Company's railroad connected with the Florida Southern Railway. This allowed for some phosphate to be interchanged to the Florida Southern, who then transported it south to Punta Gorda to be loaded onto vessels at the Long Dock. The Florida Southern Railway converted its line to standard gauge in 1892, and the Peace River Phosphate Company also converted its line to standard gauge at the same time.
In 1892, Joseph Hull, whose company Comer & Hull owned the Charlotte Harbor Phosphate Company, acquired a portion of the Peace River Phosphate Company and its railroad. By 1894, Hull merged both companies, along with two other phosphate companies, into the Peace River Phosphate Mining Company. In 1899, the Peace River Phosphate Mining Company and other companies further north were merged into the American Agricultural Chemical Corporation (AACC).
After the acquisitions, AACC President Peter Bradley sought a location for a new port on the southwest coast of Florida to simplify the shipping of phosphate. The shallow waters of the Peace River in Liverpool limited the size of vessels that could be loaded there. The company identified Boca Grande Pass, a natural deepwater inlet at the south end of Gasparilla Island, as the perfect place for a deepwater port. The AACC, under Bradley's direction, then acquired the charter of the unbuilt Alafia, Manatee, and Gulf Coast Railroad, which had been chartered in 1897 with the authority to built a railroad from Plant City to Charlotte Harbor. After gaining the charter, Bradley changed its name to the Charlotte Harbor and Northern Railway.