Hotelier Masudur Khan has purchased the Gilbert Block Building downtown and plans to renovate its second floor into a hotel.

The two-story building, on a little more than three-quarters of an acre, sold to Seaside LLC in October for $3.1 million. The sale includes the 38,000-square-foot building, including riverfront property, and a parking lot on the east side of North Holladay Drive.

The ground floor will continue to be rented as stores.

Khan helms Seaside Lodging and owns and manages hotels and restaurants in the Pacific Northwest, including the Inn at Seaside, the River Inn, the Coast River Inn and the 65-room Saltline Hotel. His wife operates the Gilbert Inn and the Inn at Haystack Rock. Khan is the past chairman for the Oregon Restaurant and Lodging Association.

“I’m happy to get the building in my portfolio,” Khan said. “I think it has huge potential.”

Other investors in the building include engineer Mark Mead, hotel builder Ryan Keck, of Pine Ridge Global, and Rhanman Tahmidur, of Gilbert Hospitality LLC.

In the first year, Khan plans to make needed utility and roof repairs and develop a more uniform, symmetrical design style.

“Our goal is to fulfill the building’s historical value to create an experience for the city, to bring customers and to enjoy the building,” Khan said. “We will keep the vibe — there’s no question about it.”

While a design has yet to be delivered, the hotel could come with an upstairs lobby, bistro, coffee shop and rooftop restaurant, catering to a high-end audience. Rooms could have small kitchens and living areas.

Khan said he expects the new hotel to open in 2023.

Renovation costs could come to an additional $3.5 million, making the investment exceed $6 million.

Owners hope to work with the city and the Seaside Museum & Historical Society to offer multimedia displays highlighting the history of Seaside, with photos, videos and memorabilia dating back to the 1800s. “We want to bring small-town history to the world,” Khan said.

Steve Wright, president of the Seaside Museum and a Seaside city councilor, said the building is among the oldest commercial buildings in Seaside.

“I trust that Mr. Khan will very likely enhance the look of the building, as he has done with other Seaside properties that he has renovated,” Wright said.

Khan anticipates approaching the state for historic renovation tax credits through Restore Oregon.

French-born Alexandre Gilbert was a veteran of the Franco-Prussian War in 1870 before following business interests to San Francisco.

According to Gilbert Inn Hotel history, learning in 1881 that land was cheap in Oregon, Gilbert and his wife Emma moved north to Astoria. Struck by the rugged beauty of the Oregon Coast and the resemblance to his native France, he saw great potential and spent the next 54 years helping to develop businesses, property and communities in the area.

Gilbert moved to Seaside in 1890 and was elected mayor in 1912.

Gilbert rebuilt the four-block Gilbert District at the intersection of Broadway and Holladay Drive after Seaside’s fire in 1912 destroyed most of the city’s downtown. The Gilbert Block Building was completed in 1914.

Gilbert later donated the land for the Promenade. He died in 1935 at age 90. After Gilbert died, his heirs sold his real estate holdings.

The section of the Gilbert Block Building along the Necanicum River was built in the 1940s.

In 2002, Avery Loschen and Will Perkins acquired the building at a time when the area was looking for a revival, with more empty storefronts than occupied ones.

During the last two decades, the Gilbert District has become a cultural and shopping destination for locals and tourists, anchored by Beach Books and the Fairweather House and Gallery.

Khan anticipates an early January groundbreaking at the property, with a ribbon-cutting ceremony for the hotel and his other real estate endeavors along South Holladay.

Mayor Jay Barber said he was excited about the recent purchase.

“Masudur’s plans to revitalize the block by supporting the current retail tenants while upgrading the historical appearance of the facade are reassuring,” Barber said. “… I am hoping that his dream and vision for the property in the heart of Seaside’s business district will all come to fruition.”