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Demolition permits were issued in June, but the historic Cornelius Hotel in downtown Portland won’t be razed.

Portland-based Arthur Mutal Investments LLC is purchasing the 105-year-old building (at 801 S.W. Alder St.) with plans to redevelop it into multifamily housing. The building, owned by TMT Development and listed on the National Register of Historic Places, was slated for demolition after funding for a previous redevelopment effort by Guardian Real Estate Services fell through in May.

Jeff Arthur, an Arthur Mutal managing principal, said TMT is providing short-term financing for the $2.1 million purchase, which is slated to close in two weeks.

On the same block, Arthur Mutal recently bought the 99-year-old Stevens Building (at 812 S.W. Washington St.) from the Church of Scientology for $4.35 million, and might buy the Woodlark Building (at 813 S.W. Alder Street) next door. Company officials see those buildings as the key ingredients in a large, integrated mixed-use development.

鈥淭hat area is getting better by the day, and we’re hoping to revitalize it even more and make that block a nice transitionary piece between the east end and the (Central Business District),鈥� Arthur said.

A lot of planning work remains, but Arthur said the initial vision for the Stevens Building is to convert it into a boutique hotel replete with a pool, a spa and a restaurant; creative office also is a possibility. The company will refine that concept over the next four to five months.

Arthur Mutal is a real estate investment and development firm that specializes in restorations. One of its projects was redevelopment of the 300 Building in the Pearl District. The company currently is working with NFN Investments on an adaptive reuse of the R.J. Templeton Building at 230 E. Burnside St.

鈥淭he Arthur Mutal team is a very creative group, and we really like their projects,鈥� said Vanessa Sturgeon, president of TMT Development. 鈥淪o we felt they would do something really great with the building, and in a neighborhood where we own a lot of the real estate.鈥�

TMT Development recently restarted construction of its $175 million, 30-story Park Avenue West tower. Slightly north, the Cornelius Hotel block is poised to absorb the influx of activity. Lewis & Clark Bank provided the financing for the Stevens Building purchase.

鈥淭he thing we’ve noticed in just talking to various lenders, both in traditional markets and in the debt fund market, is the appetite for hotels is getting better, and the desire for Portland’s market is getting better,鈥� Arthur said. 鈥淢omentum is definitely in our favor.鈥�

Adding some multifamily housing can’t hurt in today’s hot rental market, he said in reference to plans for the condemned Cornelius Hotel. In May, Sturgeon said the building would need approximately $1.5 million worth of fire and life safety upgrades before it could be occupied.

Arthur Mutal’s redevelopment would likely create approximately 20 apartments with access to the planned boutique hotel amenities. Arthur said he has an old rendering of the building from the 1920s, and his hope is to bring out some of that historic flair.

Arthur Mutal is still weighing whether to purchase the Woodlark; Arthur said it could be converted into creative office space or become additional multifamily housing.

鈥淲e’re pretty pumped,鈥� he said. 鈥淥bviously the buildings are older and have a lot of challenges, but we think it’s definitely something we can tackle.鈥�