"The Palace," said Robert Chandler, the Wells Fargo Bank's official historian, "is still old San Francisco."

There has been a Palace Hotel at the corner of New Montgomery and Market Streets for 134 years. The earlier Palace, a magnificent 800-room showpiece, was the largest hotel in the West - some say the world - when it opened in 1875 at the high point of the city's champagne and bonanza days. When it was destroyed in the great fire that followed the 1906 earthquake, the Palace became the symbol of what the writer Will Irwin called "the city that was."

The "new" Palace Hotel opened three years later, and marked the recovery of the city from the ruins of disaster.

"Lovers of San Francisco, the Palace Hotel has risen again," said Mayor Edward Robeson Taylor on opening night in 1909. "We could scarcely think of San Francisco without the Palace Hotel."

Lunch for $19.09

The actual anniversary of the new Palace is Dec. 15, but the management is staging a centennial celebration nearly five months long, beginning with special events, including hotel tours, which include a $19.09 lunch, on Tuesdays, Thursdays and Saturdays.

One reason for the long celebration is to attract attention. Like other San Francisco businesses, the Palace has been affected by the economic downturn, and the management freely admits that business is slow.

The hotel is also throwing an invitation-only celebration featuring Champagne, Palace punch and a 10-tier cake on Thursday. The hotel offered free tickets on its Web site earlier this month, but they were snapped up in two days.

It's hard to say what makes the Palace special in a city renowned for its specialness, but the hotel works hard to maintain an old-world panache.

Debs and martinis

The lobby floors are marble, the doorknobs on the 525 rooms are solid brass and the display cases in the lobby show off century-old gold table service. The famous Garden Court, which has Austrian crystal chandeliers, Italian marble columns, potted palms set under a huge stained glass dome is an official city landmark and an unofficial representation of what San Franciscans think of as high style.

The Palace is where debutantes, dressed all in white, would make their formal bow before the doyennes of San Francisco high society at the annual Cotillion; it is where suave young men would take their dates for martinis at Maxfield's bar under the gaze of Maxfield Parish's huge painting of the Pied Piper of Hamlin; the Garden Court is where San Franciscans would take visiting relatives for afternoon tea.

It has a ton of tradition. In the winter of 1950, Gaildo Pazini and his new wife, Patricia, who were married out in the Excelsior district, began their honeymoon at the Palace. The groom saved his money and spent $10.50 for an unforgettable night there. He still has the receipt.

Two years ago - 57 years, five children, seven grandchildren and two great-grandchildren later - he and his wife came back to the Palace for a party at the Garden Court.

"It's a grand hotel," he said.

There is a lot of history in the hotel, some of it a bit grim. Kings and at least one emperor, Dom Pedro of Brazil, stayed at the old Palace. David Kalakaua, the last king of Hawaii, died at the Palace in 1891.

Warren G. Harding was the last American president to stay at the Palace Hotel; he died there on Aug. 2, 1923. Several other presidents have made appearances at the hotel since Harding died, but none stayed the night.

The Palace was often the scene of civic receptions honoring the dignitaries of the day: Marshal Ferdinand Foch of France, Charles Lindbergh, the king of Belgium, Madame Chiang Kai-shek. In 1951, President Harry Truman and Soviet foreign minister Andre Gromyko came to a cocktail party where guests drank 1,700 glasses of bourbon, 1,500 glasses of Scotch and 12 gallons of martinis. The hotel kept track.

The Palace was owned for nearly 8o years by the family of William Sharon, one of the so-called Silver Kings who made a fortune in the fabulously rich mines of Nevada. In 1954, the family sold it to the Sheraton Corp. for $6.5 million.

The old barber shop with 20 fulltime barbers and seven manicurists was already history, but the new management changed the name to the Sheraton-Palace, standardized the rooms and cut some frills - like oysters Kirkpatrick from the dinner menu.

"It was no longer possible to maintain some of the costly traditions that sentiment once dictated," the new owners said.

Sit-in in the '60s

The '60s were a time of turmoil in San Francisco. The Palace Hotel was not exempt. In 1964, a famous sit-in took place in the Sheraton-Palace lobby to force the hotel to hire more minorities, particularly African Americans. Dozens of people were arrested.

In 1973, the hotel was acquired by the Kyo-ya Corp., a Japanese firm that owns most of the big hotels in Hawaii. Sheraton continues to manage the place.

By 1989, the hotel was showing its age. It shut down for more than two years and reopened in the spring of 1991. The renovation cost $150 million and won a number of awards for historic preservation. It also became known again as simply the Palace.

"I'm amazed that they kept it so well," said Pazini, who remembers the old days. "It looks as if they built it yesterday."

E-mail Carl Nolte at cnolte@sfchronicle.com.

This article appeared on page A - 1 of the San Francisco Chronicle