Sugar City was a company town for the Fremont County Sugar Company, which was part of the Utah-Idaho Sugar Company, supporting a sugar beet processing factory built in 1903–1904. Since it was created to support the factory, construction workers and early factory families were housed in tents, leading to the nickname "Rag Town". By 1904, the town consisted of 35 houses, two stores, a hotel, an opera house, several boarding houses, two lumber yards, a meat market, and a schoolhouse. The first Mormon ward was the Sugar City Ward, with Bishop Mark Austin. One of his counselors was James Malone, a construction engineer for E. H. Dyer, who was not a Mormon.