Suite Dreams

On July 2, North Carolina’s Republican-controlled legislature announced that it had finally passed its first budget in three years, making it the last state in the nation to do so. For months, no one in the legislature—not even members of the same party—seemed capable of finding common ground.

State House and Senate leaders bickered over specific funding priorities such as a children’s hospital in Apex and the scope of government job cuts. The wait was both painful for state employees and a testament to the widespread feeling that government simply does not work for anyone anymore.

But there was a time when the state’s legislators, no matter how ideologically opposed, did work together. They passed large spending programs and found ways to bridge at least some of the gaps between liberals and conservatives on major controversies. It likely helped that, for almost half of the 20th century, many of them stayed in the same Raleigh hotel.

The Sir Walter Hotel in downtown Raleigh was the epicenter of North Carolina politics for over four decades. It not only hosted important political speeches, campaign events, and lobbying meetings from the 1920s through the 1970s, but it was also the site of countless secret backroom deals. If you were a legislator who wanted to gerrymander a district, for example, you knew where to go.

“Everybody understood,” Phil Carlton, former state Supreme Court justice and longtime political operative, said recently, “that laws got made at night around a poker game in someone’s room at the Sir Walter. This was just an accepted way to do it.” 

The ‘Third House’ of Government

In the 1920s, Raleigh’s civic boosters (including News and Observer editor and publisher Josephus Daniels) had a problem: Most business convention traffic flowed to larger cities like Greensboro and Durham rather than staying in the capital, which was then only the fifth-largest city in the state.

Their proposed solution: a brand-new skyscraper hotel, complete with private baths and telephones, that would attract business travelers and host a wide variety of events. Completed in 1924 for roughly $900,000, the Sir Walter, as it was known, featured arched window openings, egg-and-dart molding, and a three-part structure with a base, middle, and ornate cap like a Greek column. Later, it would become the first North Carolina hotel to have central air conditioning. 

Sitting 10 stories high at 400-412 Fayetteville Street, the Sir Walter was only three blocks from the state Capitol. Within a few months, the hotel had become the unofficial headquarters of the legislature, housing up to 80% of lawmakers during legislative sessions. They lived, ate meals together, and held daily meetings in its conference rooms. By 1957, U.S. Senator Sam Ervin Jr. was calling the Sir Walter “the most politically saturated inn in America.”

That much concentrated political power was bound to attract lobbyists, which the Sir Walter did in great numbers. In Room 215, politicos helped themselves to the steady supply of alcohol provided by the state’s liquor lobby, which remained a haven for parties until 1957, when a News & Observer exposé led to the seizure of nine cases of liquor. Other lobbyist rooms, such as one for a trucking organization in the early 1960s, became the new sources for legislators looking for a drink.

With liquor flowing freely to powerful men, many of whom were living hours away from their wives, prostitution flourished. The authorities often ignored it, but, for a brief period during the Second World War, they decided to crack down. On August 19, 1942, a Mrs. C.F. Wertz was sentenced to eight months in prison for “using a hotel [the Sir Walter] for immoral purposes.”  

Perhaps the most dramatic moment in the history of the Sir Walter came during the 1950 U.S. Senate primary. When Willis Smith ran against Frank Porter Graham to be North Carolina’s Democratic Party nominee that year, Graham was repeatedly spat on across the state. Smith’s forces mercilessly attacked Graham, the incumbent and a former University of North Carolina at Chapel Hill president, as a communist for his opposition to Jim Crow and his belief in economic equality.

The vitriol extended to campaign workers as well, with one Graham worker imploring the candidate to “come and take all your literature out of my house! My neighbors won’t talk to me!” It was one of the most contentious races in the state’s history, with one side embracing civil rights and modernity, while the other clung to segregation and the past. 

Yet, no matter how wide the ideological gulf was between Graham and Smith, the physical distance between them was next to zero. Both campaigns were headquartered at the Sir Walter, with Graham on the sixth floor and Smith on the first. Every day, opposing staff passed each other in the hallways and ate in the same dining room. On the night of the primary runoff, June 24, 1950, which Smith narrowly won, Graham was forced to walk by his opponent and shake his hand as he left. His dejected supporters had to sneak by Smith’s whooping advocates. 

The hotel remained busy, even outside of Election Night or the legislative session. “If you came to Raleigh, you just stayed at the Sir Walter,” Tom Lambeth, a former aide to Terry Sanford and a longtime Democratic political adviser, recalled.

During the 1960 presidential campaign, when John F. Kennedy and Lyndon Johnson vied for the Democratic nomination, both candidates (and eager Kennedy surrogate Harry S. Truman) stayed at the Sir Walter. Lambeth often heard stories of tense meetings in the lobby and flirtatious dalliances in the dining room. It was no wonder that the hotel was often referred to as the “third house of government.”

But the state’s Black citizens couldn’t access their representatives at the Sir Walter, which was segregated. In 1963, civil rights protesters staged a “check-in,” a sit-in in the lobby with suitcases. Sanford, who was one of the few governors who did not base his campaign out of the hotel, responded by meeting with the protesters and listening to their demands. (According to Carlton, Sanford and other liberals worked out of the nearby Carolina Hotel in order to avoid confrontations like the one during the Graham/Smith race.)

While not immediately successful in its goal of desegregating the hotel, the Sir Walter protest shone extra light on racial discrimination across Raleigh. 

The End of an Era

By then, the Sir Walter’s stature as a political hub had started to wane. The North Carolina Legislative Building, which featured much larger meeting and conference rooms, opened in 1963. As more people moved to the post-World War II suburbs and traveled the interstates, centralized downtowns, including Raleigh’s, declined nationwide. Without steady bookings and revenue, the hotel was harder to maintain.

More important, perhaps, was another factor: The Vietnam War, multiple shocking political assassinations, the explosive Democratic convention of 1968, and the Watergate scandal shattered the public’s trust in its leaders. Backroom dealings were no longer tolerated, at least not openly. The new generation of politicians, who promoted fair primaries and political transparency, diminished the strength of old-fashioned power brokers. 

The Sheraton hotel chain took over the Sir Walter in 1968 and tried, unsuccessfully, to revive its reputation. Blanche Manor, who wrote a gossip column for the News & Observer, lived there for a time, greeting guests and attending social events into her 90s. The hotel changed ownership multiple times after that, but the efforts to attract business eventually fizzled out. Finally, in 1978, the building was converted into affordable housing units for seniors. It was added to the National Register of Historic Places that same year.

Some state leaders shifted their operations to the Raleigh Hilton Inn on Hillsborough Street; others went to the Governors’ Inn in the Research Triangle Park. Neither of these places worked as well as in the heyday of the Sir Walter, which benefited from both its elegance and its proximity.

Today, Raleigh’s oldest surviving hotel building continues to evolve. In 2019, the Capital Realty Group, a New York firm, purchased the Sir Walter for almost $17 million and began renovations in the basement. Maintenance workers soon discovered what appeared to be a Prohibition-era speakeasy. When Anthony Rapillo, a local restaurateur, heard about that, he committed himself to reviving it as an underground cocktail bar, which he plans to call “The Third House,” by the end of 2026. 

“They had their normal meetings upstairs, but I am sure this is where many of the secret deals were made,” Rapillo said of the building’s political past. After years of navigating zoning requirements and specialty repairs, he is excited to bring what will likely be his 10th hospitality space in North Carolina to the century-old hotel. 

While that’s good news for the Sir Walter, there is no longer any single hotel headquarters for either Democrats or Republicans in North Carolina. The past five governors have used four different locations for their victory parties, with Roy Cooper recently opting for a convention center at NC State and Josh Stein choosing Marriott City Center. With state politics as divided as ever, it’s hard to remember the days when politicians came together—if for no other reason than to indulge in the same overnight vices.