Almost two years after developers bought the vacant building, work is starting to convert a century-old Dallas hotel into apartments.

The landmark Ambassador Hotel just south of downtown is Dallas' oldest surviving hotel building.

Built in 1905, the 6-story building on Ervay Street is owned by a partnership headed by developer Jim Lake Jr.

Lake is starting work to transform the historic building into 103 "micro" apartments.

"They will average around 500 square feet," Lake said. "We started demolition on the project today. We are officially underway."

A drawing by Merriman Anderson/Architects shows the completed building. (Merriman Anderson / Architects)

Lake has hired Dallas' Merriman Anderson/Architects to design the redo of the building.

"The outside will not change," Lake said. "The public areas will not change — we will restore all those. It gets all new infrastructure."

A ground-level swimming pool, retail space on the first floor and tenant amenities including a lounge are part of the plans for the building.

"We are working with Dallas Heritage Village next door to have a connection to them," Lake said. "We are working with the city to abandon St. Paul Street behind the building."

Lake was referring to the short stretch of the street that separates the hotel from the 20-acre park behind it.

The Ambassador opened originally as the Majestic Hotel. The building was once considered Dallas' most luxurious residential property and was touted as the city's "first suburban luxury hotel."

In the late 1930s the brick and stone building was given a covering of stucco and renamed the Ambassador Hotel.

In 1955 was converted it to a retirement home. It continued to operate as a senior's apartment building through the late 1970s.

The Ambassador was owned for 20 years by a Christian organization, Institute in Basic Life Principles, which sold the property to Lake's partnership.

"I've done a lot of complicated deals, but this is probably the most" complicated, Lake said. "We still have a lot of pieces to put together."