Shalini Palace was built in 1931-34 and named after Princess Shrimant Shalini Raje of Kolhapur. It was built at a cost of Rs 8.00 lakhs then. The Palace stands majestically on the west bank of the Rankala Lake and overlooks the picturesque lake. The Palace is built from black stone and Italian marble. Towering black stone arches form the verandah and porch. The wooden doorways are intricately decorated and fitted with Belgian glass bearing the crest of the Maharaja of Kolhapur. The stained glass arches and the massive tower clock have been restored to their former beauty. The Palace is landscaped by lovely gardens. In 1987, this Palace was converted into a 3-star hotel property, making it the first and only Palace hotel in Maharashtra State. It has been used as a backdrop for many Indian films.