When it was completed in 1888 for James Mirams and James Munro on the corner of King and Collins streets, the Federal coffee palace was the largest hotel in Australia. Architects Ellerker & Kilburn won the competition to design the hotel, which eventually cost £90 000 to build and some £20 000 to furnish. They teamed up with runner-up William Pitt to create a vast ornate temperance hotel of nearly 500 rooms, including 370 bedrooms, two dining rooms, a café, shops, two drawing rooms, reading, writing and reception rooms, and two billiard rooms. It was entered through a magnificent arcaded lobby running through four floors with a glass roof and an ornately balustraded white and red marble staircase. One hundred and sixty-five feet above it rose a four-storey domed tower that in 1967 became the home of touring car driver and Melbourne social identity Peter Janson.
Temperance having proved a financial failure, the hotel was eventually granted a licence. In 1897 it became the Federal Palace Hotel and in 1923 the Federal Hotel. For many years it was a focal point of Melbourne society gatherings and business conventions. Ships coming up Port Phillip Bay were guided by the blue star light that shone from the truck of the flagstaff on the dome. In 1972 the hotel was sold and, sadly, demolished to make way for commercial development.