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Situated in the south-central Lower Peninsula of Michigan, the city of Albion is in east-central Calhoun County, bordered by Sheridan Township to the north and northwest, and Albion Township to the south, southwest, and southeast, with a small portion of the city bounded by Parma Township in Jackson County.

Interstate Highway 94 passes just north of the city, with BL-94 entering the north-central part of the city and existing in the east-central borders. Michigan Highway 99 (M-99) enters the south-central part of the city. Concord is 8.4 miles southeast, Homer is 9.4 miles southwest, Parma is 9.4 miles east, Springport is 10.9 miles north, and Marshall is 11.7 miles west of Albion.

The Kalamazoo River enters the city at its central-eastern border, flowing west, then turns south to exit in the central-southern part of the city, while the North Branch of the Kalamazoo River joins with it just after the river turns south.

The land upon which the city was built was purchased by land speculators in 1830, and Tenney Peabody acquired their holdings in 1833, moving to the area with his brother, Charles Blanchard, and another man by the name of Clark Dowling. Peabody's family soon followed, becoming the first settlers.

Peabody built a grist mill along the river in partnership with Jesse Crowell, who established the Albion Company, a land development company, in 1835. Crowell platted the village in 1836, naming it for his home town in New York, and becoming its first postmaster on May 5, 1838. Albion was incorporated as a village in 1855 and became a city in 1885.

Construction began on a building to house Wesleyan Seminary in 1841, and classes were first held in the local Methodist Church in 1843, moving to the newly constructed Central Building in 1844. The Albion Female Collegiate Institute was founded by the Wesleyan Seminary Corporation in 1850, and the two schools consolidated in 1857 as the Wesleyan Seminary and Female College at Albion, becoming Albion College in 1861.

The forks of the Kalamazoo River provided power for several mills, allowing Albion to become a significant mill town, as well as an agricultural market. The Central Line railroad arrived in Albion in 1844, soon afterward becoming the Michigan Central Railroad, enhancing the town's industrial interests. Albion's other railroad, then known as the Northern Michigan Railroad, and later the Lake Shore & Michigan Southern's Lansing Division, came through in 1872. Currently, Albion hosts an Amtrak Station, whose Wolverine line provides daily passenger service to Albion, in both directions between Chicago, Illinois and Pontiac, Michigan, via Detroit.

In the last couple of decades, the closure of several local manufacturers has diminished Albion's manufacturing role, while the city has transitioned into a college town. Situated on 574 acres in the southeastern sector of the city, Albion College has a student population of about 1,500 and is a major employer.

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