The Cats-Eye Lighthouse is a small lighthouse on a cliff overlooking the eastern bay of Cappy Town. It is only ever mentioned in passing throughout the episodes and never directly visited, although in the episode Tourist Trap, the tourist bus came as close as anybody gets in the whole series to the lighthouse itself.
From the design of its top, it does not appear to be manned, but it is perpetually lit day and night. It looks completely different from any of the other buildings the Cappies have or King Dedede has, as it is sleek and has a modern design compared to the wooden thatched cappy buildings and Dedede's medieval castle. Judging from the obvious lack of any shipping activity besides King Dedede's Whaling Ship, or even the presence of a port near Cappy Town, it appears to be more or less redundant.
After the events of episode 98 (Cappy Town Down), most of Cappy Town was reduced to ruin by a Destrayer attack, including much of King Dedede's Castle. When the Halberd takes off into space to go after Nightmare's Fortress, the aft view shows Dedede's Castle levelled to the ground, and the lighthouse is no more than a small pile of rubble where it once stood. Whether it's rebuilt along with much of Cappy Town when the Halberd's crew returns to Dream Land is unknown.