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It was built in 1774 during the reign of Abdul Hamid I, in the Veli Ahmed district of Kocaeli. It was sold to watchmaker Ali Effendi, who lived in Izmit. It was nationalized by the Ministry of Culture and began operating as an Ethnography Museum in 1987. The palace, which is an example of civic architecture in the eighteenth century, is one example of this period with its woodwork, pencil work and architectural structure.