M.H. Donnelly purchased L. Canepa's saloon in the Foster building at the north east corner of Main and Brown. They named this business the "Palace Saloon" and other members of their family arrived in town to help with the business, but by November, the Palace was moving out and the Foster building was renovated for B.O. Hart of Eureka's saloon. M.H. Donnelly bought 341-353 Main Street, Ferndale, next to the "Brick Store". John Morrisand sons tore down the old Rochdale store. Construction began in late April on the 30x75 foot building. Geo Milnes superintended construction for Mr. Donnelly and his brother John. It included both the saloon and offices above the bar. The grand opening was held on September 6, 1902. The late hours kept by the saloon have averted at least one fire, Mr. Donnelly was the first to call in a fire alarm in October 1905 on an adjoining building - which was saved. The San Francisco Earthquake of 1906 heavily damaged the Palace plaster and windows as well as breaking the stock of liquor bottles. In 1909 gasoline lighting was installed in the building. In 1917 M.H. Donnelly sold the Palace to his partner Mike Matteri and retired. In 1929, the building was sold again, now described as a "billiard parlor and soft-drink emporium of Bravo and Arnibaldi".. The upstairs offices were rented to dentists, club rooms, a billiard club, attorney-at-law, stenographer, dressmaker parlor, millinery store, justice of the peace office, collection agency and medical doctors as well as residential apartments since 1902. In 1960, the building was operated as both a saloon and a liquor store. The building was damaged by the 1992 Cape Mendocino earthquakes. It was at this time the short modern windows were installed. By 1992 the building was covered in asbestos shingles which were removed after a 2007 fire and the building restored to original condition except for the short, modern windows above the lower siding and the modern door. The building was purchased by the owners of the Ivanhoe hotel in 2016 changing nothing inside. Two pool tables, a full sized shuffleboard and the original 40-foot bar are still in place in the building. There is a plaque on the building which says it is the "furthest western bar in the conterminous United States."
Architectural elements
The first floor has been modified, but the second floor still retains the twin square bay windows, on which the trim has been restored in 2008 to the original appearance. The bays are topped by mansard roofs which are shingled and have box cornices with dentils and brackets as well as a parapet wall. Behind the false-front the roof is pitched and has skylights. Much of the original ornate woodwork survives.
