Palace Hotel, Garden Terrace, San Francisco 001

The original Palace Hotel was built by San Francisco banker and entrepreneur William Chapman Ralston who heavily depended on his shaky banking empire to help finance the $5 million project. Although Ralston's Bank of California collapsed in late August 1875, and Ralston himself unexpectedly drowned in San Francisco Bay on the same day that he lost control of the institution, it did not interfere with the opening of the Palace Hotel two months later on October 2, 1875. Ralston's business partner in the project was U.S. Senator William Sharon who had helped cause the collapse of the Bank when he dumped his stock in the Comstock Lode. Sharon ended up in control of the hotel as well as both the Bank and Ralston's debts both of which he paid off at just pennies on the Dollar.

With 755 guest rooms, the original Palace Hotel (also known colloquially as the "Bonanza Inn") was at the time of its construction the largest hotel in the Western United States. At 120 feet (37 m) in height, the hotel was San Francisco's tallest building for over a decade. The skylighted open center of the building featured a Grand Court overlooked by seven stories of white columned balconies which served as an elegant carriage entrance. Shortly after 1900 this area was converted into a lounge called the "Palm Court." The bartender, William "Cocktail" Boothby, was a fixture at the hotel for some years. The hotel featured large redwood paneled hydraulic elevators which were known as "rising rooms". Each guest room or suite was equipped with a private bathroom as well as an electric call button to summon a member of the hotel's staff. All guest rooms could be joined together to create suites, or to make up large apartments for long term residents, and the parlor of each guest room featured a large bay window overlooking the street below.

The monarch of the Kingdom of Hawaii, King Kalakaua, died in this hotel on January 20, 1891. Financed primarily by Bank of California co-founder William Ralston, it offered many innovative modern conveniences including an intercom system and four oversized hydraulic elevators called lifting rooms. The most notable feature of the hotel was the Grand Court that served as an entry area for horse-drawn carriages. The area was converted to the palm filled "Garden Court" a few years before the 1906 earthquake.

"A palace truly! Where shall we find its equal? Windsor Hotel, good-bye! you must yield the palm to your great Western rival, as far as structure goes, though in all other respects you may keep the foremost place. There is no other hotel building in the world equal to this. The court of the Grand at Paris is poor compared to that of the Palace. Its general effect at night, when brilliantly lighted, is superb; its furniture, rooms and appointments are all fine, but then it tells you all over it was built to "whip all creation," and the millions of its lucky owner enabled him to triumph." .... Andrew Carnegie, Round the World. Free guided tours of the hotel are led by volunteers of the San Francisco City Guides, a program of the San Francisco Public Library.

Although the hotel survived the initial damage from the early morning April 18, 1906, San Francisco earthquake, by late that afternoon it had been consumed by the subsequent fires. Notably, tenor Enrico Caruso (who had sung the role of Don José in Carmen the night before) was staying in the hotel at the time of the quake, and swore never to return to the city. The urban legend is Caruso, "stood in his nightshirt holding a personally autographed photograph of President Theodore Roosevelt and demanded special treatment."

While the ruins of the original hotel were being razed and its permanent replacement built, a temporary 23-room facility known as the "Little" or "Baby" Palace Hotel was quickly designed and constructed about eight blocks west of the Market Street site at the NW corner of Post and Leavenworth Streets.[14] A modest two story frame structure, the "Baby" Palace was opened with considerable fanfare on November 17, 1906, just seven months after the earthquake and fire had devastated the city.

The hotel only remained open to the public until July 1907, however, when the Palace Hotel Company leased the nearby Fairmont Hotel on Nob Hill for ten years, and in turn leased the Post Street building to The Olympic Club for five years as a temporary clubhouse while that organization's facility was also being rebuilt. Within a decade of its construction, the building had already been replaced by a four story brick apartment block built in 1916, which still occupies much of the northwest corner lot at Post and Leavenworth streets where the "Baby" Palace Hotel had briefly stood.

Completely rebuilt from the ground up, the "New" Palace Hotel opened on December 19, 1909, and quickly resumed the role of its namesake predecessor as an important San Francisco landmark as well as host to many of the city's great events. While externally much plainer then the original Palace, the new "Bonanza Inn" is in many ways as elegant, sumptuous, and gracious on the inside as the 1875 building. The "Garden Court" (also called the "Palm Court") — which occupies the same area that the Grand Court did in the earlier structure — has been one of San Francisco's most prestigious hotel dining rooms since the day it opened.

Equally famous was the "Pied Piper" Bar located just off the gleaming polished marble lobby, which was overseen by the famous Maxfield Parrish painting of the same name. The 16-by-6-foot (4.9 by 1.8 m), 250-pound (110 kg) mural was removed on March 23, 2013 for sale at a planned auction at Christie's, which was anticipated to bring between up to five million dollars. In the light of strong public opposition to its removal, however, the hotel's owners relented and instead had the painting cleaned, restored, and returned to the bar where it was rehung with considerable fanfare on August 22, 2013.

The Ralston Room, named for co-founder William Ralston, is off the main lobby to the left of the painting. President Woodrow Wilson hosting a luncheon to support the Versailles Treaty at the Garden Court of the Palace Hotel in 1919.

The hotel served as the stage for several important events. In 1919, Woodrow Wilson gave speeches in the Garden Court in support of the Treaty of Versailles and the League of Nations. In 1923, Warren G. Harding's term as President ended suddenly when he died at the Palace Hotel, in Room 8064, an eighth floor suite that overlooks Market Street.[20] In 1945, the Palace Hotel hosted a banquet to mark the opening session of the United Nations.

The Palace was sold to Sheraton Hotels in 1954 and became the Sheraton-Palace Hotel. Soviet Premier Nikita Khrushchev spoke at a banquet at the Sheraton-Palace during his American tour in 1959. The Garden Court was declared a San Francisco Landmark in 1969. In 1973, not long after Sheraton was bought by ITT, it sold the Palace to the Japanese Kyo-Ya group, along with all of their hotels in the Hawaiian islands. Sheraton continued to manage the hotel and the name stayed the same. The entire structure of the Sheraton-Palace was declared a landmark in 1984.

The Sheraton-Palace Hotel closed on January 8, 1989. It reopened on April 3, 1991, as the Sheraton Palace Hotel, without the hyphen in its name, following a $150 million restoration that garnered national media attention and numerous awards. In 1997, the finale of the David Fincher film The Game, starring Michael Douglas, was shot in the Garden Court. The hotel dropped the Sheraton name in the 1990s and transferred to another division of Starwood Hotels, The Luxury Collection, becoming, again, the Palace Hotel.

A 60 story, 204 to 207 m (669 to 679 ft) residential tower was proposed in 2008, to be named the Palace Hotel Residential Tower, designed by the architecture firm Skidmore, Owings & Merrill.[citation needed] Construction never began due to the 2008 global financial crisis.[citation needed]

In 2015 the hotel underwent an extensive renovation to its guest rooms, indoor pool and fitness center, lobby, promenade, and The Garden Court.

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