Frank L. Nigey built a three-story brick hotel in 1906 for the luxury market, then served only by the InterOcean Hotel one block closer to the Northern Pacific depot. The Nigey Hotel had electric service, hot and cold running water in every room, shared bathrooms on each floor, and local and long-distance telephone service.
The original building had front and rear rows of rooms parallel to Third Avenue Northwest. Its success led to an addition that more than doubled the hotel's size. Beginning in June 1917, the expanded building housed the city's first telephone exchange near its First Avenue Northwest entrance and in the basement. Dahners Music Store also occupied the building. From 1920 to 1928, D. C. Mohr operated Mandan's first J. C. Penney store there.
In 1910, nightly rates at Mandan hotels ranged from $1 at the Hotel Mandan to $1.50 at the Dakota and Merchants hotels. The InterOcean and Nigey hotels charged $2.25 and up. The City Cafe served hotel guests and downtown workers. L. S. Schaff operated the restaurant from 1939 through 1941. In January 1941, its space was remodeled with a horseshoe-shaped counter and reopened as Stein's Eat Shop under Eddie Stein.
After the Nigeys died, Frank Wetzstein and former Morton County sheriff Charles McDonald purchased the hotel in 1929 and operated it as the McDonald Hotel. Fred Sommerfield bought McDonald's interest after McDonald's death. Wetzstein owned and operated the adjacent Palace Theatre.
Fire destroyed the hotel in April 1967. Patrons of the Corner Bar in the building's northwest basement first reported the blaze around 10 p.m., while the city's annual Firemen's Ball was underway at the Elks Club one block away. Northwestern Bell had already moved the telephone exchange to a larger building across the street.
The building's tenants at the time of the fire included the Greyhound bus depot, Baumstarck Pfaff Sewing Center, Mandan Credit Bureau, and the offices of optometrists A. L. Larson and Michael Riisager, as well as the hotel's 54 rooms on the upper floors. The ruins were cleared for a parking lot that later served the Mandan branch of Wells Fargo Bank.
