The former Savoy Hotel, once a Houston landmark and now a downtown eyesore, has been decaying in the city's skyline for nearly a quarter-century.

Although the 17-story hotel at 1616 Main may seem to be in a prime spot, near the light-rail line and on the edge of downtown and Midtown, it is one of several buildings in the area that have been abandoned for years.

This month, however, a group of private investors purchased the property and plans to convert the historic space into a Holiday Inn within the year. Real estate experts say the move shows even some neglected areas of downtown are ripe for revitalization.

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"I think what it says is downtown is so healthy that even the buildings that were considered by many to be demolition targets have now been sold for remodeling," said David Cook, a downtown property broker with Cushman & Wakefield in Houston.

Rahul Bijlani, one of the developers, said he believes the property is in a part of town that is "turning around." He said the hotel will be the Holiday Inn flagship of Houston when it is completed.

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"I'm sure there were other folks who tried to make it work in the past, but timing was challenging," Bijlani said. "It's a good time to develop in Houston. It's safe to say the Houston hotel market is recovering nicely."

The Savoy property is not the only multistory building in the southwestern part of downtown that seemed to be on the path to demolition in recent years.

A local real estate investor has purchased the Central Square Plaza at 2100 Travis with plans to restore it. A group of private investors bought the long-deserted Days Inn property, 801 St. Joseph's Parkway, last year and expects to develop the space either into a high-end to midlevel hotel or an apartment complex.

Bijlani said the Savoy building is in an excellent location on Main Street.

"We are pretty excited that we can take what was an important part of the history of Houston and bring it back to life," he said.

The original seven-story structure was built in 1909 as the first high-rise apartment building in Houston. An adjacent 17-story addition was built in 1966, but both buildings sat vacant after the Savoy Hotel closed in 1988.

The original building was demolished in 2009 after an inspection found cracks in the building facade and bricks were seen falling from the building. The roof had collapsed. Only a few tiles from its entryway remain.

The hotel's new owners hope to preserve those tiles and turn the original structure's footprint into a green space with a patio bar.

The group of investors refused to disclose the purchase price. The former owner did not return a call requesting comment.

Bob Eury, executive director of Houston Downtown Management District, said the hotel was open an "amazingly long time ago." He said the neighborhood has experienced renewed activity, with several projects working in the vicinity.

"The owners picked a good time," he said. "I think the time is right for this project at this point."

Eury said part of the challenge with the properties is that as the buildings get older, they have a harder time meeting the standards of certain hotel chains. Many parts of the Savoy property give it an advantage, such as the adjacent parking lot and attached garage and its proximity to the transit station, he said.

A construction crew is working to restore the hotel, hammering away inside and out.

Inside, dusty books line shelves in an abandoned lobby, rust has eaten into the hardware of a chandelier and a sweeping staircase with a tattered red carpet leads to nowhere. Paintings hang askew, while a cash register and a dust-covered armchair look as if they haven't been touched since the doors closed.

"There's too much good to bulldoze," Nupen Patel, another of the developers, said as he flipped through pieces of history that had collecting dust inside the building.

The new owners hope to incorporate aspects of the historical structure, such as the shiny elevator doors, a glass mail chute that was part of the original hotel and some of the paintings hanging on the walls.

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The developers said the Holiday Inn will fill a gap in the mid- to upper-end hotel market. Most of the hotels in the downtown area are high-end, they said.

Patel said they plan to bring in a high-end restaurant, build a patio bar, update the rooms and revamp the exterior. Engineers told the developers the concrete on the structure looked like it had just been poured yesterday. Patel said if they tried to build a structure like the Savoy today, it would cost tens of millions of dollars.

"You can't build buildings like that today," he said.

Yet it, the Days Inn and the Central Square Plaza had fallen on hard times. In 2011, the properties were highlighted in a Chronicle investigation of abandoned downtown buildings. In the three years prior, they had received dozens of citations from the Houston Police Department. The Savoy Hotel building alone had racked up 24 violations.

Eury welcomes the interest in the Savoy and its surroundings.

"When you look around, there aren't many building like that left," he said. "After many, many years we are finally seeing changes in that area."

Nancy Sarnoff contributed to this report.