Built in the early 1900s with native New Zealand hardwoods, this magnificent building used to be the home of the extended Baigent family, one of the original European settler families in Nelson. They operated a timber yard at the bottom of the slope and the tall attic window at the front of the building used to be a clock tower. It remainded as their family home until the 1980s. It is an A-Listed Heritage Building.

In the nineteen-eighties, the house was bought by the Foster family who extensively renovated the building, exposing much of the original Rimu and Matai timbers.

It became Dave's Palace after Dave bought the building in 1994 moving his hostel from the former Mount street address. Since then it has been continually improved and renovated. In 1997 the hostel became known simply as "The Palace".