It was built by the Israelite Giako Modiano who followed the designs drawn by his son Eli Modiano (Ecole Centrle, Paris). It is known as the "Old Goverment House" and from 1913 and onwards it was successively used as a palace, as the residence of the General Governors of Macedonia, as a Religious Seminary and as a Military School. Since 1972, it houses the Folklife and Ethnological Museum of Macedonia-Thrace.

The building was constructed in 1906 on a seaside field of more than one acre and it develops on three levels: elevated basement, two stories and an attic, all of which occupy an area of 1200 square meters. Its architectural formation has an eclectic style stongly influenced by art nouveaux. Notably significant is the two-leveled balcony (lodgia) with a view to the sea.