An Art Nouveau palace, now a hotel

An insurer tears down a mansion to build a palace

Gresham Palace stands beside you, now the Four Seasons Hotel Budapest, right where the Chain Bridge meets the Pest riverbank. Its stone face and iron balconies still carry the swirling lines of Art Nouveau, the style that swept across Europe at the start of the 1900s.

Before this building existed, a neoclassical mansion called Nákó House stood on the spot. Count Kálmán Nákó and his wife, Berta Gyertyánffy, built it in 1827, and it became a gathering place for Budapest's cultural life. Franz Liszt came through its rooms, along with Wagner and Brahms.

In 1880, the London-based Gresham Life Assurance Company bought the property. English law at the time barred insurance companies from investing in stocks, so rental income from real estate was one of the few legal places to put their money. The company later decided it wanted a grander home for its foreign headquarters. They tore down the old Nákó House and hired local architects Zsigmond Quittner and the brothers József Vágó and László Vágó to design something new.

Construction ran from 1904 to 1906, and the building opened its doors in 1907. The company named it after Sir Thomas Gresham, a 16th-century English financier who founded the Royal Exchange in London. The ground floor once held the Gresham Café, where a circle of Hungarian painters met for decades after.

Painters, a cabaret and a club meet downstairs

A circle of painters calling themselves the Gresham Circle met there for years, carrying on the loose, light-filled style of an earlier generation of Hungarian impressionists. In 1921, Nagy Endre opened a cabaret theater, the Pódium, in a ground-floor room facing Mérleg Street. Nagy Endre had invented Hungarian literary cabaret, and the Pódium gave it a stage. By 1924, the building also housed the National Liberal Club, a group that spoke out against the totalitarian politics then rising across Europe.

On June 27, nationalists sympathetic to the League of Awakening Hungarians carried out a fatal attack on Jewish guests at the Lipótváros Club in Lipótváros.

People still ask why the façade is studded with carved hearts. One story says the architect Zsigmond Quittner worked them in for love of a woman who would later live there. Another, told more often, points instead to a romance between Countess Irma Széchenyi and Thomas Gresham himself, the Englishman whose name the building carries. Neither story is settled. Locals just call it the "palace of hearts" and let visitors pick the version they prefer.

From November 29, 1944 to January 18, 1945, the Budapest Ghetto held between 50,000 and 70,000 Jews within a sealed area of 0.3 square kilometers in District VII. Lipótváros stood next to the ghetto but was never part of it. Between 5,000 and 14,300 people died inside the ghetto walls from starvation, disease, and violence before Soviet forces arrived.

Along the Danube riverbanks, the Arrow Cross shot as many as 20,000 Jews from the Budapest Ghetto between December 1944 and January 1945. Bodies piled up in the streets and storefronts of the ghetto when Soviet forces liberated it on January 18, 1945.

Soviet troops barrack where company directors once worked

The Red Army took the building as a barracks after World War II, and it never fully recovered. The state nationalized it, and what had been an insurance company's showpiece became a warren of apartments and offices, including the city's tourism board. Plaster cracked, paint peeled, and families lived where company directors once kept offices. By 1987, the river-facing stretch of buildings around it, Gresham Palace included, earned UNESCO World Heritage status for the Danube bank itself. The recognition came while the building was still crumbling inside.

Two foreign firms fight to turn it into a hotel

When communism ended in 1990, the Hungarian government handed the palace to the city of Budapest. The city tried first with Oberoi Hotels, an Indian hospitality group, who signed on in 1991 to convert part of it into a luxury hotel. Legal fights with residents still living inside dragged on for years, and Oberoi walked away in 1995. In 1998, Gresco Investments Limited bought the building and won approval to rebuild it as a hotel while keeping its Art Nouveau details intact. The company raised $85 million, and in 1999 Four Seasons agreed to manage the finished property. Ownership changed hands once more in 2001, when the Irish firm Quinlan Private bought the building and paid for the actual reconstruction, restoring the staircases, the stained glass, and the mosaic floors underneath decades of grime.

Restoration returns stained glass hidden from the war

The hotel reopened in June 2004, after a $110 million restoration that put back the staircases, the wrought ironwork, and the original peacock gate at the top of the stairs. Workers had found some of the Hungarian stained glass hidden on the rooftop, tucked there during the war to keep it safe from bombing and from Soviet hands. It went back into place. The lobby floor alone holds over a million mosaic tiles. In November 2011, Oman's State General Reserve Fund bought the hotel, though Four Seasons has kept running it ever since.

Today the building holds 179 rooms, a spa with thermal pools, and a cocktail bar where the old coffeehouse crowd used to argue about painting. The heart carvings are still there too, waiting for the next guest to ask what they mean.