The Palace Hotel Building was built in 1879 as part of Butler’s rebuilding after the city was burned during the Civil War. A good example of high style Italianate architecture with an elaborate bracketed cornice, it originally had an exterior second-story balcony that collapsed in the early 1900s. The building was designed for retail business on the first floor, a hotel on the second floor, and a spacious entertaining area on the third floor, and it became the city’s commercial and social center. The first floor housed M.S. Cowles Clothing, then the American Clothing House, and finally J. C. Penney’s. The second floor served for many years as a luxury hotel before later becoming office space. The third floor functioned as a banquet and ballroom space for the region’s elite and was taken over by the Elks in 1906. The stair from the second to the third floor and much of the interior wood trim are original. The building remained in commercial use until renovation began after Vaughn X. Prost, developer and builder, purchased the property in 2001 to restore the historic hotel into class "A" office space; Prost Builders of Jefferson City, Missouri, completed the historic restoration and renovation in 2003.