This building was built in 1889. It is located at 1004-1008 Waters Street, Port Townsend, Washington. The owner was Captain TL Tibbals. Architects were Whiteway and Schroeder. The brickwork was contracted to Nelson and Davis. Carpenter Contractors were Andrews and Whiteway. Construction Costs were $28,000. The building housed a billiard parlor and 3 saloons, one known as the Townsend Tavern on the first floor. There were rooms for rent on the upper floors.
From 1923–33, the two upper floors operated as the Palace Hotel. Actually it was a.brothel nicknamed Palace of Sweet. It operated until the mid 1930’s. For a time there was a speakeasy during Prohibition.
In 1976, restoration began on the building interior. It was completed in.1984. Refurbishing of the whole building was completed in 1988. The rooms are part of the Palace Hotel.
Over the years other businesses occupying the building included: real estate offices, shoe dealer, law offices, Northern Express Railway, Port Townsend Call Newspaper, Fish and Clark Autos, Leader Newspaper, Townsend Theater, Washington State Liquor Store, a gift and florist shop, Orthopedic Thrift Shop, and various restaurants.