Built for the Finkelstein & Rubin circuit, the 2,400-seat New Palace Theater opened with several short films and a live performance by Ethel Barrymore on October 5, 1914. The building’s elaborate brick and terra-cotta facade and made it the talk of the town. Three story lit marquee letters out did everything else on Hennepin Avenue in those days. Ornate and enormous, the half million dollar theater brimmed with gilt plaster-work, marble,carving, casements, and fine art. There was a odd arrangement of seats with just 700 on the floor and the rest flung up in the huge sweeping balcony. Whenever, the theater magnate, Moses L. Finkelstein was in the house, he used to climb to the highest level of the balcony and stand there, with the theater all lit up, admiring it.
During the Roaring 20’s, the Palace was operated on a “fixed profit” plan by the Mutual Burlesk Company presenting a combination of movies and stage shows. Owners of shows were paid a certain amount even when the offering failed. During the Great Depression the Palace stayed afloat hosting a variety of vaudeville acts, boxing matches, wrestling and double feature motion pictures. Roy Rogers appeared on the Palace’s stage in 1938. The Minnesota Amusement Company took over in 1940 and ran the Palace as a second-run movie theater. After the war, the number of seats was reduced to 1700 and the theater was sold again to Berger Amusement Co. On May 13th, 1953 the Minneapolis Star’s Bob Murphy announced the end of the Palace with the headline “FILM FANS CAN’T BELIEVE IT”. The interior was stripped, seats were sold for a few dollars a piece and an outfit by the name of Federal Lumber & Wrecking cleared the site for a parking lot a few weeks later.