Located in the town of San Rafael, which lies in the foothills of the Iztaccíhuatl volcano, the Compañía de las Fábricas de Papel de San Rafael y Anexas was a paper mill operation. The area's altitude and temperate climate makes it a habitat filled with woodlands, and many of the trees would be turned into paper in the factory.

The predecessor of the paper mill was the Ferrería San Rafael, a foundry established in the 1850s. The foundry was transformed into a paper operation at the turn of the century, after it was sold to the Spanish industrialists Andrés Ahedo and José Sánchez Ramos.

This San Rafael Paper Factory was so successful that it lead to the establishment of most of the infrastructure in San Rafael. In 1904, construction began on the Casino Cosmopolita, a combination leisure center, hotel, and living quarters for high-ranking single employees.

At the height of the Porfiriate, Mexico's rapid industrialization period, the San Rafael Factory employed nearly the entire working population of the town—making it one of the country's largest employers. During the Mexican Revolution, the factory continued to operate thanks to an alliance with the Zapatista faction, who took over the Casino as their headquarters. This lead to the Casino's construction formally being concluded in 1919.

From the 1920s onward, the company was known for its comparatively progressive stance on labor movements, leading to the establishment of several unions. By the end of the 20th century, however, its output had decreased drastically. Most of its properties, including the casino, were given over to the Mexican government.

The living quarters were occupied as housing. Their terraced housing style is uncommon in the country. Along with other architectural features of European influence as well as the natural scenery, these have lead to San Rafael's nickname as "The Mexican Alps".

The main casino building served as a function hall as well as a restaurant and nightclub before being abandoned and allowed to decay in the early 21st century.