The historic Maclellan building downtown has been sold by businessman Henry Luken to a group which announced plans last year to remake the structure into a hotel.
The hotel is still on go, though the start date isn't clear yet because of the recession, a principal for the purchaser said.
"Same intention is conversion to a hotel," said Ben Parker of Maclellan Partners LLC. "We think we've got a lending partner worked out."
Maclellan Partners paid $3.85 million for the building at 721 Broad St., records show.
The planned sale of the building and word about putting a hotel in the structure were announced in July 2008. At the time, Mr. Parker said the company was investing about $20 million to turn the building into a 120-room hotel.
But, Mr. Parker said this week that financing delays caused the closing of the acquisition to occur only recently.
Construction and demolition could begin before Christmas but it's more likely to take place in the first quarter of 2010.
"But, if that falls through we've got holding power," he said. "That's an important long-term asset."
Lynda Childress, chief executive officer of Luken Holdings, said the hotel is an opportunity to revamp the structure and area.
"It's a wonderful old building," she said.
Kim White, chief executive of the nonprofit downtown redevelopment group RiverCity Co., said the central city still needs more hotels.
"I've seen the plans. It would be first class," she said. Mrs. White said one concept called for a rooftop bar.
Mr. Parker plans to turn all of the 13-story building into the hotel except BB&T Bank on the first floor.
He said branding the building as a Hotel Indigo is in the plan.
"We still have the franchise," Mr. Parker said.
The Maclellan building, built in the mid-1920s, was home to Provident Life and Accident Insurance Co.