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The cut existed as early as 1915, called "the triangle part" of the loin butt.  Triangle tip, cooked in wine, was served at Jack's Corsican Room in Long Beach in 1955. The cut was marketed under the name "tri tip" as early as 1964, at Desert Provisions in Palm Springs.
The late Jack Ubaldi of Manhattan's Florence Prime Meat Market claims to first having got the bottom sirloins in the late 1940s and pulled out a muscle that he called the triangle. He started cutting what he dubbed Newport steaks from this piece because he said the shape was like the logo on a Newport cigarette ad he had seen.
Otto decided to cook that triangular shaped steak which was located next to the ball tip. He cooked it whole and then sliced it thinly; instead of cutting a thick slice and cooking it like a traditional steak. The flavor was marvelous if you sliced it thin against the grain. The discovery got Otto thinking that this cut of meat could be sold as a steak instead of being ground up into the less expensive hamburger. Otto started talking to their retail customers and marketed the steak as "Tri-tip" because of its shape. 
Larry Viegas, a butcher at a Santa Maria Safeway store in the late 1950s, says that the idea to cook this as a distinct cut of beef first occurred to his store manager, Bob Schutz, when an excess of hamburger existed in the store (into which this part of the animal were usually ground). Viegas says that that day, Schultz took a piece of the unwanted meat, seasoned it with salt, pepper, and garlic salt, and placed it on a rotisserie for 45 minutes or an hour; the result was well-received, and Schultz began quietly marketing it as "tri-tip".
It became a local specialty in Santa Maria in the late 1950s. Today, it is seasoned with salt, pepper, fresh garlic, and other seasonings, grilled directly over red oak wood to medium-rare doneness. Alternative preparations include roasting whole on a rotisserie, smoking in a pit, baking in an oven, grilling, or braising in a Dutch oven after searing on a grill. After cooking, the meat is normally sliced across the grain before serving."
Sometimes labeled "Santa Maria steak", the roast is quite popular in the Central Coast of California and the Central Valley regions of California. It has begun to enjoy increasing favor elsewhere, as well, for its full flavor, lower fat content, and comparatively lower cost. Along with top sirloin, tri-tip is considered central to Santa Maria-style barbecue. In central California, the fat is left on the outside of the cut to enhance flavor when grilling, while butchers in many states trim the fat side for aesthetic purposes.
Tri tip is called aiguillette baronne in France and is left whole as a roast. In northern Germany, it is called Bürgermeisterstück or Pastorenstück, in Austria Hüferschwanz, and in southern Germany it is called the same name as the traditional and popular Bavarian and Austrian dish Tafelspitz, which serves it boiled with horseradish. In Spain, it is often grilled whole and called the rabillo de cadera.
This cut of beef can be sliced into steaks, grilled in its entirety, or used in chili con carne. In order to grill or roast the tri-tip, heat the pan on high until it's very hot. For best results, the tri-tip should be seared and roasted putting the fat side down in the pan. The roast can then be put in the oven and cooked for about 10 minutes per pound until the internal temperature is 130 degrees for medium-rare. 
North American Meat Processors Classifications
In the U.S., the tri-tip has the meat-cutting classification NAMP 185C.
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