Owner Ramesh Diora says he finally has $3 million to make badly-needed upgrades to the 193-room downtown hotel, which was built as a Hilton in the mid-1970s.

There is a renaissance happening at Erie's Avalon Hotel.

And owner Ramesh Diora believes that his plans for the 193-room downtown facility — which has seen multiple owners and few upgrades since it was constructed as a Hilton in the mid-1970s — could complement ongoing downtown revitalization and make the hotel a major regional player in the hospitality industry.

One of the first major components of Diora's $3 million renovation plan debuted Friday when the Avalon, 16 W. 10th St., opened Bolero, its new Spanish-themed restaurant.

Housed in a fully-renovated space that was once Benjamin's Pub and Eatery, Bolero features fine dining space for 65 people, a lounge that can seat another 30 patrons and a full bar. The menu features tapas, steak empanadas and paellas featuring chicken, shrimp or eggplant, as well as a full wine list.

There is more coming, said Diora, who purchased the Avalon with four business partners in 2010 for $1.8 million after the previous owner declared bankruptcy.

There are plans for a steakhouse that could be open in a few months. Repairs are being made to the hotel's roof and its heating, ventilation air conditioning system. And Diora intends to revamp the hotel's two ballrooms and improve roughly 100 guest rooms.

Diora said he is putting more than $1 million of his own money into enhancements at the hotel, which has 67 full-time and part-time employees. The improvements can be made now, Diora said, because he was finally able to lock down financing after several years of being turned down by lenders.

Further, Diora said, he bought out two of his four business partners recently, which gives him more decision-making autonomy.

Diora realizes many city residents likely wonder why he didn't update the Avalon sooner.

"When we took over this property, it was already distressed," said Diora, 52, a former jeweler/diamond importer who has been a self-employed entrepreneur for nearly three decades. "I tried to look for loans. ... In 2010 the economy was really going against us, no lender was ready to finance such a huge property. We needed $3 million to $5 million at least.

"But I found a solution," Diora said. "There is huge potential for this property, and we want to be part of good things that are happening downtown. People want us to succeed. And I am committed to doing this."

John Buchna, the Erie Downtown Partnership's executive director, wants to see the Avalon succeed. The Downtown Partnership serves a 70-block area from Sassafras to Holland Streets, between the bayfront and 14th Street.

The Downtown Partnership has crafted a master plan for downtown that includes creating and linking four distinct districts. Each district would have its own character, function, target markets and design, according to the plan, which also includes improvements to the physical environment downtown; housing upgrades, economic development involving the arts, offices, technology and tourism; transportation improvements, and more aggressive marketing of downtown Erie.

Buchna said Erie "must have a viable hotel downtown" in order for long-range center city improvement plans to thrive.

Diora and Buchna have talked about the Avalon's potential eligibility for the Erie County Gaming Revenue Authority program that awards grants for fixing facades at downtown businesses. The Downtown Partnership works with the Gaming Revenue Authority on that grant program.

"They are reinvesting back into their business, and they want to be more proactive going forward," Buchna said. "They know the exterior of the hotel needs some improvements. Is there funding available through us to make their structure more appealing?

"Like any business, you need to continue to reinvest," Buchna said. "This is all a good sign."

Irena O'Sullivan, 38, is the Avalon's director of food and beverage. She called Bolero, the new Spanish restaurant, "the first little step" in the hotel's transformation.

The hotel's former restaurant, Benjamin's, had been shuttered for four years.

"Erie has enough business for everybody," said O'Sullivan, who has worked at hotels in Connecticut, Ohio, and London during a 15-year hospitality career. "This restaurant is our first baby. ... We really want to do a new, big-city urban feel right here in Erie."

Erie lawyer Phil Friedman welcomes the news about Diora's improvement plans for the Avalon.

Friedman, 63, is a partner with the Conner, Riley, Friedman & Weichler law firm, located across the street from the hotel at 17 W. 10th St.

"Any kind of improvement there is a benefit to all the businesses around there," Friedman said. "Sometimes when you go outside (the Avalon) appears to be semi-abandoned. But when there's an event there and lots of people around on the sidewalks, you feel like you're in a much bigger city.

"To have a hotel in the center of the city that's really up to date," Friedman said, "is better for everybody."

Diora agrees. He said improvements could someday lead to an affiliation with a larger, national hotel chain. But no matter what the Avalon's future holds, Diora said he is "all in" regarding his short-term renovations plan.

"I could have said, 'You know, let it go,' and sold this place. Sometimes it's even cheaper to do that," Diora said. "But it's a pride (thing). I said, 'I'm not going to do that.'

"Nothing really scares me," Diora said. "I think this hotel could be the thing that's missing right now in this area."

Kevin Flowers can be reached at 870-1693 or by email. Follow him on Twitter at twitter.com/ETNflowers.