The region, with a series of bayous feeding into the Gulf of Mexico, first attracted attention as a place for winter homes about 1876. Some of the newly arrived visitors spotted Tarpons jumping out of the waters and so named the location Tarpon Springs. The first Greek immigrants arrived to this city during the 1880s, when they were hired to work as divers in the growing sponge harvesting industry. In 1905, John Cocoris introduced the technique of sponge diving to Tarpon Springs. Cocoris recruited Greek sponge divers from the Dodecanese Islands and Halki in particular leading, by the 1930s, to a very productive sponge industry in Tarpon Springs, generating millions of dollars a year.

When a red tide algae bloom occurred in 1947, wiping out the sponge fields in that region of the Gulf of Mexico, most of the sponge boats and divers switched to fishing and shrimping for a livelihood. The city then converted most of its sponge-related activities, especially the warehouses where they were sold, into tourist attractions. The Sponge Docks are now mostly shops, restaurants, and museums dedicated to the memory of Tarpon Springs' earlier industry. Most sponges sold on the docks are now imports: Very few sponges are harvested from the area. Attempts have been made in recent years to restart local sponge harvesting. Led by local businessman George Biliris, in the late 1980's the sponge industry made a great come back. In the fall of 2007, a record harvest of sponges by a single boat was made. The industry is alive and well in Tarpon Springs.

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