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Change in Old Town Chinatown won’t happen overnight, and the Grove Hotel redevelopment team knows that.

“For the hotel to succeed and to really be that catalyst, there has to be more – especially, ground-floor retail – activity going on,” said Bob Naito, principal of Naito Development. “And I think we’ll stimulate it with the galleries and maker spaces, and all that stuff is going to come, but we’re going to have to incubate and nurse it along.”

A joint partnership of Naito Development, New York-based Eagle Point Hotel Partners and San Francisco-based Filament Hospitality last week was chosen by the Portland Development Commission as its preferred development team among five finalists vying to redevelop the Grove Hotel. Pending completion of a disposition and development agreement with the PDC, the Naito team will purchase the building for $630,000. The group is not requesting any public money to help pay for the proposed $6.9 million project.

The iconic, 117-year-old building at the gateway to Old Town Chinatown has languished since the PDC purchased it in 2010 for $3.7 million. Previously, developer David Gold and local businessman John Jay bid to revitalize the building, but lost financing and failed to lure commercial tenants to the gritty neighborhood.

Criminality still exists there, but the new development team isn’t deterred. Ingrid Summerfield, co-founder and principal of Filament Hospitality, cited a renovation she oversaw near San Francisco’s Tenderloin neighborhood when she was president and CEO of Joie de Vivre Hospitality.

“When we opened the (Commodore Hotel), we had prostitution, drugs – we had all kinds of issues right in front of our door,” she said. “Over the course of a year or two, the neighborhood very much changed and today you wouldn’t recognize it because it’s become revitalized.”

Add lights, restaurants and people, she said, and criminals become less comfortable.

To address homelessness, Summerfield said the key is creating opportunities for permanence. She is a board member of the Community Housing Partnership, a San Francisco nonprofit that buys derelict buildings and rehabilitates them into permanent affordable housing. She thinks there may be similar opportunities in Portland, but the Grove Hotel project will come first.

“I think the first real opportunity is the fact that you have a near-empty building that’s boarded up,” she said. “That in and of itself is an eyesore and kind of sets the stage to the entry of Chinatown. By revitalizing and renovating the property, it gets it a whole different sense of arrival. That I think is probably the most important component … You give that property a concept and an element of confidence and pride, and all of a sudden it has a much sunnier outlook.”

The Naito/Eagle Point/Filament proposal calls for a 52-room, 190-bed “design-oriented, lifestyle” boutique hotel. Each room will have at least one bed, a bathroom, a flat-screen TV and Wi-Fi, but be smaller and cost less than a typical downtown hotel room. The ground floor will feature retailers, bars, coffee shops and restaurants; Naito said he has received strong interest from local chefs, and the group may partner with Lake Tahoe-based Basecamp Hotel. Banks have expressed interest in providing financing.

The proposal came together somewhat serendipitously. Naito Development shares a building with Tarlow, Naito & Summers LLP Attorneys at Law. One of the law firm’s partner’s daughters – Bridget Summers – is an associate at Eagle Point. She stopped in to visit and inquire about development opportunities in Portland.

“That was Friday,” Naito said. “Monday morning, PDC released the RFP for the Grove Hotel. How is that for coincidence?”

Within 48 hours, the group formulated a concept based on the idea that a hotel should be a jumping-off point to the city. Naito credited his son Will Naito, a Naito Development project manager, and Summers for touting that model.

Stephen Chan, a principal at Eagle Point, is employing that model to varying degrees in projects across the country. He’s not worried about Old Town Chinatown’s gritty reputation. When he thinks of the Grove Hotel, he’s reminded of the Phoenix Hotel – a rock ‘n’ roll themed hangout in San Francisco’s Tenderloin neighborhood that Summerfield managed for Joie de Vivre.

“You go there today and (the area is) probably worse than Portland is, seriously, in terms of what’s there and around there,” he said. “And at the same time, the Phoenix has continued on for well over two decades now with its hip style. And (the area is) really part of the character of it, and it’s done phenomenally well.”

Meanwhile, Old Town Chinatown, Chan said, is on the rise. Indeed, a new five-year action plan for the neighborhood identifies approximately $57 million in urban renewal funds that could become available for revitalization, and businesses are already starting to mobilize.

Also, the Grove Hotel redevelopment team is buoyed by the pending relocation of the Right 2 Dream Too homeless camp across the street. In February, a group of Pearl District stakeholders committed $846,000 toward a new home for the camp. It hasn’t moved yet, but Naito said the team has about 20 months to figure it out before the Grove Hotel reopens.

Gold and Jay didn’t have that luxury, and Bob Naito said this new project would not have come together without the extensive legwork completed by them.

Also, Summerfield has personally opened approximately 25 hotels – many adaptive reuse projects – throughout the country. She has focused on creating “demand generators” – businesses that can meet neighborhoods’ needs.

“I’ve never seen it not work,” she said.