The township of Mayfield was formed in 1855, in what is now southern Palo Alto. Leland Stanford started buying land in the area in 1876 for a horse farm, which became a university in 1891, dedicated to his son who died of typhoid fever at age 15 in 1884. In 1886, Stanford came to Mayfield, interested in founding his university there. He had a train stop created near his school on Mayfield's downtown street, Lincoln Street (now named California Avenue). However, he had one condition: alcohol had to be banned from the town.
Known for its 13 rowdy saloons, Mayfield rejected his requests for reform. This led him to drive the formation of Palo Alto as a Temperance Towns in 1894 with the help of his friend Timothy Hopkins of the Southern Pacific Railroad who bought 740 acres (3.0 square km) of private land in 1887 for the new townsite. The Hopkins Tract, bounded by El Camino Real, San Francisquito Creek, Boyce, Channing, Melville, and Hopkins Avenues, and Embarcadero Road, was proclaimed a local Heritage District during Palo's Alto Centennial in 1994. Stanford set up his university, Stanford University, and a train stop (on University Avenue) by his new town. With Stanford's support, saloon days faded and Palo Alto grew to the size of Mayfield.
On July 2, 1925, Palo Alto voters approved the annexation of Mayfield and the two communities were officially consolidated on July 6, 1925. This saga explains why Palo Alto has two downtown areas: one along University Avenue and one along California Avenue.
Source: Wikipedia (Palo Alto, California)