J. Frank Smith constructed this commercial building in 1906, the year Canyon was incorporated as a town. Elected to the first city board of alderman, Smith operated a land company on the second floor. The ground floor was initially occupied by the Canyon Mercantile & Hardware Store. S. B. McClure opened the Palace Hotel at this location in 1912. A cafe, first operated by P. D. Casey, later shared the first floor. Despite several changes in ownership, the Palace Hotel remained in operation until 1960. (1980)