Landsmark Ltd., a London-based developer had originally won the job last January when it offered $15.5 million for the building but lost it in August because of lack of progress. The $40 million project will involve adding three floors will be added to the seven-story building, creating 200 rooms, three times the size proposed by Landsmark.

Boston-based Saunders, which owns the Lenox and Copley Square Hotels in the Back Bay and an airport hotel in Revere, has until next summer to arrange financing, obtain permits and close on the purchase. Financing for hotels has recently become a tricky prospect here, with a number of hotel projects having difficulty in arranging financing. Jeffrey Saunders could not be reached by presstime but he reportedly said that he plans to bring in a financial partner and put up nearly 50% equity, making it easier to obtain financing.