Palace Hotel

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The wealthy original owner loves the tedious restoration and renovations finished here.

Spirits with strong connections come back to visit. Some have stayed.

The “Palace of Sweets” causes painful, guilt-inducing consequences.



The Palace hotel has been described as “A beautifully restored Victorian Hotel in the heart of downtown Port Townsend.”

The Victorian Palace Hotel can be found on the second and third floor of the Captain Tibbals Building, a fine example of the architectural Richardson Romanesque style. The first floor is home to a restaurant and bar, as well as a variety of “specialty retailers”.

A unique feature of the outside of this building is that its arched windows look like they “extend for two stories through the use of twin columns that bracket each window bay on the buildings facade”. So says their literature. The windows are stunning!

ALL the guest rooms are named after the “girls” who worked on the second and third floor rooms from 1925 to perhaps 1940/41. Madam Marie’s lovely corner suite has been restored to how she liked it.

The nineteen guest rooms and suites are “uniquely furnished” with antiques and Victorian decor, with most furnished with private bathrooms and featuring fourteen to fifteen foot ceilings, “Soaring windows” are on display with some rooms offering kitchenettes. Some of the rooms have stained-glass skylights.

When we visited Port Townsend in the summer of 2012, they let us wander around the hotel, taking pictures. It is quite an impressive place, with ample lobby space on each floor. The decor is lovely, and we felt that we had stepped back into time, when Captain Tibbals lived here.



Captain Tibbals, a wealthy, retired seaman who wore a lot of hats in Port Townsend, invested $28,000 to build this grand three story, Victorian Richardson Romanesque style brick building, meant to last. Construction began in 1887, and it opened as a billiard parlor and Townsend Tavern, in 1889, with rooms for rent on the second and third floors. There was one bathroom for each floor. Tibbals and his family lived on the second floor.

Because of its winning combination of solid construction and prime downtown location, many businesses, legal and otherwise, made their home here. Eventually, the first floor space was carved into several sections to rent to “specialty retailers.” The Call Newspaper moved into one of them during the early 1900s. Over the years, the first floor businesses included The Egyptian Theater, the Northern Pacific offices, a grocery store, a state liquor store, a florist shop, and several restaurants.

During Prohibition, an upfront, well-known brothel and hotel opened up on the second and third floors, earning the nickname, “The Palace of Sweets.” Its Madame was Marie, who had a lovely corner suite on the second floor, which included a fireplace that was the only one in the building. Her room was “richly decorated,” and had “plush red wallpaper with deep green woodwork”.

As well as having traditional exterior rooms with windows, buildings of the late 19th century, often had four small interior rooms with no windows, which were lit by large, stained-glass stairway skylights. During the Palace of Sweets years, the prostitutes used these interior rooms to service their clients with sensual, erotic activities frowned on by society.

In 1935, the authorities supposedly tried to close down the Palace of Sweets with a raid, but according to observations made by a secretary whose office was at the end of the second hall floor, the brothel continued at least until 1940/1941, when World War 2 started. As late as 1940, groups of young women were seen by this secretary every day at noon, waiting for the second floor bathroom in their bathrobes, which suggests that the brothel may have still been running, if more underground than before.

Or, it could be that single young women rented rooms here because they worked for other businesses in town. Though it’s fishy that they all gathered together to use the bathroom at noon, suggesting that they all got off work at the same time, probably late in the evening, and early in the morning, the typical working hours of prostitutes.

Being well-known as a brothel for at least ten years, operations would have to be very carefully planned, to avoid detection by authorities, who may have been willing to look the other way if the brothel was discreet. By WWII, however, it would’ve been closed down completely. All brothels were ordered closed by the federal government by then, to help the war effort.

During the 1940s, a regular boarding house/office building came into being here, renting both their rooms and the main floor to businesses, and to individuals. Thirty years later, it was a different story.

By 1970, the building was a real fixer-upper opportunity. The upper floors were no longer very usable, which meant that income generated by businesses on the first floor had to cover the upkeep and expenses for the whole building. The Captain Tibbals Building was sorely in need of money for restoration and renovation if it was to become financially successful  again.

As it was a well-loved icon in Port Townsend, money was successfully raised to finance a “long and tedious restoration” that was started in 1976. This included renovating and restoring the guest rooms to closely resemble their memorable past, in the Victorian Era and the Roaring Twenties.

While completion of the restoration and renovation was accomplished by 1977, restoration and shoring up of the woebegone exterior and foundation had to wait until 1984, thanks to state and federal matching grants. Major foundation repairs and the long missing sheet metal cornices were restored.

Once again, the building’s owners used all of its space to generate income, adding a star to Port Townsend’s historic downtown. Not only were local people and visitors happy, but also those entities who loved the Palace Hotel, or who had a strong connection to this place were also very pleased!



People who work hard at establishing a business, and are very proud of their accomplishments, sometimes like to come back and visit, either to protect their work or help the people who are now running their business, especially if the place has been restored and renovated. Spirits also enjoy the memories associated with their old haunts.

Captain Tibbals was very happy with his dream building, where he could run his own tavern and billiard parlor, and live there as well with his family. His spirit must be tickled pink with the restoration results as well as all the improvements, like the new fancy bathrooms!

People with strong attachments to a place in life sometimes choose to stay or visit there in their afterlife.

The entity of a former housekeeper makes yearly appearances to check up on things.

An entity known as the Grouse Woman, was perhaps a wet-nurse or midwife whose services were used by one of the former owners’ wives, or by pregnant prostitutes and/or their babies.

A boy entity, Adam, once lived in the building with his mother.

The entity of a homeless man who used to sleep in the basement still calls it his home.

People who suffer the consequences of their bad choices, sometimes feel guilt or deep regret that keeps them in this world.

The entity of Father Patrick has been asked to do last rites for all of the prostitutes’many babies who died and were buried in the basement.

Father Patrick broke his vows and had sex with a prostitute whom he fell in love with, saw his child born dead in the basement, and performed the last rites for the child, but felt he wasn’t worthy to do so for this little soul, or for any of the other babies who died.

Not only did he suffer from guilt, he also mourned the prostitute whom he had loved. She may have died too in childbirth, or left him, unable to love him back.

Working as a prostitute or sex worker comes with occupational hazards such as disease, unwanted pregnancies, abortions, childbirth gone wrong, personal misfortune, heartbreak or murder at the hands of a client.

Prostitutes unable to carry their babies to term saw them born dead and buried in the basement, causing them grief and guilt.

At least one of these women may have died with her baby in childbirth.

Places that recognize and honor past residents or guests who once stayed there, sometimes encourage the spirits of these honored souls to return and enjoy being remembered, tickled to be known in this way in the afterlife.

While the girls’ clients may have enjoyed this guilty and sensual pleasure, prostitution was and always has been looked on as low-life line of work by society, soiling their reputations forever in Port Townsend and elsewhere. When the Palace Hotel was restored to its former glory, each guest room was named after one of the many women who worked in the “Palace of Sweets.” Receiving some positive attention and having their names attached to such lovely rooms, must appease their restless spirits somewhat. They even appear in their favorite Victorian gowns, as spirits can choose to appear however they want to be seen by the living. Because the hotel was restored to its original Victorian decor, these damaged spirits want to fit in too; residents, whether seenor unseen, who may try to work out their restlessness and hurts, while having at least a little fun as well with the guests!

The life of a prostitute was one that didn’t offer much of a future, unless the woman could find a client-turned-boyfriend-turned husband, who would take her away from it. When this hope of escape is crushed by tragedy or a change of mind by the beloved husband-to-be, the prostitute is sometimes overcome with hopelessness and either endsher own life, or may die of a broken heart.

The entity known as the Lady in a Blue Dress (perhaps Miss Claire or Katherine) walks the halls, looking for her lost lover, who suddenly disappeared, leaving her broken-hearted. Another female entity, also thought to be a prostitute, communicated with investigators through a “talking board,” and told them her name was Betty. She was 39 years old.

Spirits and ghosts have been known to attach themselves to paintings, which they leave for the structure where the painting has been hung. The entity known as The Lady in a Blue Dress has been seen coming out of her portrait.



“If you come here, you might get touched by a ghost and it will startle you, but I don’t want people to think this is a scary place,” says housekeeper manager Cheryl Heller.

Known entities include those of Captain Tibbals, Adam, the former housekeeper, the homeless man, Father Patrick, Claire, Katherine and Betty. Staff, visitors, and guests have been treated to the following paranormal experiences…

General Activity

Encounters with solid, life-like entities dressed in Victorian gowns.

Sensations of being touched by unseen hands brushing past them as they walk down hotel hallways.

Orbs that are not dust or insects have been captured on film and digital photography in several places.

On the Second Floor: A Female Spirit (Perhaps Claire or Katherine)

Known as: The Woman in a Blue Dress; (Some think she is Claire or Katherine.)

Since the 1960s, “The Woman in the Blue Dress” is often seen at the top of the stairs on the second floor. This entity has been seen leaving her portrait there.

Her favorite room is Room 4, and she has fun teasing the living at times.

In the hotel’s “Ghost Files”, an incident was reported and noted.

Guests who were spending the night in Room 4 were startled when the door suddenly “bolted open.” They didn’t disappoint her with their reaction, and gave the spirit some chuckles as they dashed down to the night manager and reported her behavior promptly.

Other guests have reported dreaming about the Lady in Blue.

People sleeping in Room 3 or 4 are awakened by strange noises, and have heard a cry or a groan.

Other guests have noticed the aroma of perfume. Still others have felt a cold draft from the hall.

They have heard a knocking on the door but when they opened it, no one was there.

One guest claims to have been touched by her.

On the Second Floor Lobby: The Entity of Captain Tibbals

Described as being a benign, happy male presence who likes to stay in this area, where he can observe all the activity, and recall his fond memories.


The Female Entity in Room 9: Perhaps a former tenant, or one of “the girls.”

She makes her presence known at times, but no details are given in my sources. I bet some details are in the hotel’s “Ghost Files.”

On the Third Floor (Room 3): A Female Presence

Perhaps this is be Mrs. Tibbals, some former tenant, or another one of “the girls.”

She likes to stand near the stove, as she has been seen and felt there.

Third Floor: The Spirit of Betty

Thought to be a prostitute. She spoke to some investigators through a “talking board,” and told them her name was Betty and that she was 39 years old.

The shadow of a person has been seen going down the hallway.

Third Floor: The Spirit of a Little Boy

Perhaps a child of Captain Tibbals, or of a former tenant, or one of the prostitutes’ babies born here who survived a few years.

This friendly little boy (around six to eight years old) told the manager/housekeeper, Cheryl Heller, that his name was Adam.

Adam asked psychic medium Robin where his mother was.

His apparition has been seen throughout the third floor.

In The Basement: The Spirit of a Native American Woman and Children

These spirit children are perhaps the spirits of the deceased babies or her own kids.

She talked to psychic medium Robin Alexis during the PIHA investigation. This pleasant, friendly female entity called herself “Grouse Woman”, and told Robin that she had died in a fire.

Strong generalized emotional energy of grief has been observed, and regret is very much apparent; some of it is residual, some of it comes from mourning entities.

In The Basement: The Spirit of a Man

Identified as a homeless man who used to sleep here.

Described as a mellow soul, pleased to be able to continue to stay in his favorite place in this world.

He has been seen by staff member, Susan Euro, who was putting away the Palace Hotel Christmas decorations. She saw the solid back of a male, described him as being bald, wearing a plaid shirt, and sitting at the basement work bench.

He looked like a real person. He was there one moment, but gone the next.

If he was a real person, he would’ve had to walk past her.

In The Basement: The Spirit of Love-sick Father Patrick

Full of guilt and in need of forgiveness: He confessed his misdeeds to psychic medium Robin Alexis.

He failed his vow of chastity by falling in love with one of the prostitutes, made her pregnant, and then had to minister last rites to her stillborn infant.

After this, Father Patrick didn’t feel his services for infants, living or not, were any good because of his own sin.

The prostitute he loved either died with her baby, or left him. He continued to long for her.

In The Basement: Other Spirits of Sorrowful Prostitutes

Psychic Robin Alexis was overcome with a feeling of great sorrow for the prostitutes who lost their stillborn or premature babies, having to see their little bodies buried in the basement dirt.


A “Big Yes Indeed” is in order, with one exception. When Psychic medium Robin Alexis was able call on a higher power, Jesus, and sought help from other spirit priests who had crossed over, the tortured soul of Father Patrick found peace from his guilt, and forgiveness for his wrongdoing. He became unstuck, and was able to pass over to the other side.

Even though Father Patrick was released, other spirits, maybe as many as ten, still call The Palace Hotel their home or favorite place to visit.

Many guests and staff, especially the manager/housekeeper, have had personal experiences with friendly spirits. Within The Palace Hotel’s “Ghost Files,” many of these experiences have been shared on paper.

The PIHA investigation group, led by Kathy Gavin, president of the Lewis County Historical Museum, assisted by the nonprofit’s founder, Vaughn Hubbard, along with Psychic medium investigator, Robin Alexis [Bad Link], conducted both psychic and scientific investigations of The Palace Hotel, and got interesting results.

Alexis, who has a radio talk show and a Web site on psychic phenomena, came along with these investigators and was able to connect with some of the spirits, while the PIHA captured hard evidence, including EVPs, etc., that back up conversations Alexis had with the spirits. Fascinating stuff!



The Palace Hotel
1004 Water Street
Port Townsend, Washington 98368
(360) 385-0773 * (800) 962-0741

The Palace Hotel is located on the corner of Water Street and Tyler Street, in the heart of historic downtown Port Townsend, along the water front, one block from the ferry dock. Turn left on Tyler Street and park behind the hotel in their parking lot.




  • Ghost Hunter’s Guide to Seattle and Puget Sound
    By Jeff Dwyer
    Pelican Publishing Company – 2008
  • Palace Hotel web site History Page * “A host of ghosts? Port Angeles woman, others probe paranormal activity in old Port Townsend hotel,” by Jennifer Jackson for Peninsula Daily News online
  • “On Halloween and other days, specters lurk in places throughout Peninsula,” by Arwyn Rice for Peninsula Daily News online
  • Palace Hotel page on Yelp! * PIHA – Ghost of the Historic “The Palace Hotel”, Port Townsend, WA – on the Internet Archive
    “‘Lady in Blue’ said to wander hotel’s halls,” by Jeff Chew for Peninsula Daily News on KOMO * “PIHA Investigates the Historic Palace Hotel,” on

Our Haunted Paranormal Stories are Written by Julie Carr

Our Photos are copyrighted by Tom Carr

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