COFFEE CITY, Texas (KETK) — Coffee City is located on Lake Palestine in southeast Henderson County. It was formed in the late 1960s after the development of the lake.
For many years, it was known as a place where residents in Smith County, which was a “dry” county, went to purchase beer and wine. When liquor sales were made available in Smith County, fewer people went to the town’s stores.
Today the town promotes is location on the lake as a destination for boaters and anglers.
The population has remained steady over the years at a few hundred residents.
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