Long tells GlobeSt.com the all-in cost of conversion, including the acquisition, is $92.5 million. Work will begin in February and is scheduled for completion in mid-fall 2009. The hotel will be an upscale boutique hotel, the 10th in Kimpton's Palomar brand and the company's 11th adaptive reuse development. "Since our first adaptive reuse project in 1991, we've enjoyed bringing new life to architectural landmarks in major urban settings," says Michael Depatie, president and CEO of Kimpton, in a statement.

The Art Deco building was competed in 1931. It is an historic structure, and Long says the new owner has applied for federal historic tax credits. The exterior will be restored and preserved essentially intact, but with a new entryway. It will have a new ground-floor restaurant, more than 6,000 sf of meeting space, a 16-person high-tech boardroom and a 3,000-sf penthouse-level ballroom featuring original details, including ceiling molding, and views of Center City on three sides.

Hotel Palomar

Approximately five years ago, Kimpton began expansion to the East Coast with three hotels in Chicago, then one each in Boston, New York and Washington, DC. "Philadelphia's a natural for us," Long says. "We looked at other buildings, but we particularly liked this one because it lays out well for a hotel and it's in a fabulous location, two blocks from Rittenhouse Square. Also, we have highly technical expertise in the conversion of historic buildings.

"We also think there's demand for and a lack of high-end boutique hotels in Philadelphia, and we hope to be first in meeting that that demand," he adds. "Although we're not a convention hotel, expansion of the Pennsylvania Convention Center is a plus, as it will continue to drive business to Center City." Kimpton specializes in boutique hotels and operates 41 in the US and Canada and plans an additional 19 over the next three years.