A historic Belltown building that once was the center of Seattle's film industry has been sold to a real-estate investment company that plans to renovate it and probably turn it into a hostel or hotel — its original use.

A historic Belltown building that once was the center of Seattle’s film industry has been sold to a real-estate investment company that plans to renovate it and probably turn it into a hostel or hotel — its original use.

Gibraltar of Seattle bought the William Tell Apartments last week for $3.1 million, county records show. Gibraltar principal Kurt Fisher said the company will make a final decision on the building’s future in the next month or so.

While a hostel or “European-style” hotel is most likely, apartments are a possibility, Fisher said. He called the three-story Spanish colonial-style building, at 2327 Second Ave., “a great piece of property in a great part of town.”

Plymouth Housing Group, the previous owner, rented 45 rooms in the stucco-and-tile William Tell to very low-income tenants for more than 20 years. Paul Landros, Plymouth’s executive director, said the nonprofit decided to sell because the 83-year-old building needed major repairs that made no sense for the group to undertake.

The building has been vacant for about a year. Renovations would have reduced the number of units to 25, Landros said.

Plymouth, which runs a dozen low-income apartment buildings in central Seattle, plans to use proceeds from the sale to help build an 84-unit complex at First Avenue and Cedar Street.

Gibraltar owns about 40 apartment buildings, mostly in the Seattle area, some of them “cool old buildings” like the William Tell that the company has saved from the wrecking ball, Fisher said.

“There’s something about the work you leave that is way beyond the kind of money you make,” Fisher said.

A 2007 city survey of historic downtown properties concluded the William Tell was a top priority for designation as a historic landmark.

Sarah Sodt, downtown coordinator for the city’s Landmarks Preservation Board, said nomination papers have been prepared, but action has been on hold while the building changes ownership.

Fisher said his business partner has met with board representatives, and Gibraltar is exploring what landmark designation would mean.

The William Tell, originally known as the Lorraine Hotel, was built in 1925 in the middle of what then was Seattle’s “Film Row.” Major Hollywood studios all had distribution centers in Belltown, where Northwest theater managers would come to preview films and decide which ones to book in their theaters, according to the city’s 2007 historic-resources survey.

Managers, studio representatives and movie stars on publicity tours all reportedly stayed at the Lorraine, then one of Belltown’s few hotels.

Eric Pryne: 206-464-2231 or epryne@seattletimes.com