Colorado City's future was in question in 1871 when Colorado Springs was laid out. Not only was there a new town, but Ute Pass was no longer a popular route into the mountains. The Leadville Wagon Road went over the Hayden Divide (now known simply as Divide) and southwest along Twin Creek until it met
the South Platte where it divided. The north branch led to Tarryall and northern South Park. The south road headed west over Wilkerson Pass to South Park and the South Platte River. The main road led to Fairplay but several other trails branched off. A half dozen of these led over the mountains to the Arkansas
River and Leadville.
There were shorter, and easier trails being built from the Denver area.
To improve travel through Ute Pass, Colorado Springs founder William Palmer planned a better road through the narrow gorge that Fountain Creek followed. His Central Improvement Company provided the majority of the needed financing. A new road was blasted out from the granite along Fountain Creek above Manitou.
The new route eliminated the long hill on the Indian trail up Ute Pass that had taken a higher line from Manitou into the mountains and met Fountain Creek four miles to the northwest. It also cut about a mile off the trip and allowed passage of heavier freight wagons, even though it was still quite steep and in places traversed a precarious ledge barely wide enough for one wagon. A gate controlled traffic through the tightest spot.
The improved mountain access brightened the economy of Manitou as well as Colorado City. The community felt secure again. But there was a downside for Colorado City. More of the new residents were moving to Palmer's city. By 1873, the county seat was moved from Colorado City, under protest from that community, to Colorado Springs.