The Palmer House was built in 1901 by Ralph and Christena Palmer on the site of the Sauk Centre House, the city's first hotel, which had burned down on June 26, 1900. It was ideally situated in the heart of Sauk Centre's business district and just over a block from the train station. The Palmer House was the first building in Sauk Centre to have electricity. The Palmers lived on the premises with their two children, and were assisted in running the establishment by Christena's mother and brother.