• Watch Weekly jouranalists discuss the implications of the President Hotel sale on an episode of "Behind the Headlines."

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The one-time fashionable President Hotel, whose iconic rooftop sign defined Palo Alto's downtown skyline during its heyday, could once again open its doors to hotel guests for the first time in 50 years.

A Chicago-based development company has purchased the six-story Spanish Colonial building at 488 University Ave. that now serves as an apartment complex and plans to turn it back into a hotel.

Palo Alto Councilwoman Lydia Kou said representatives from the Graduate Hotels division of AJ Capital Partners told her they planned to close escrow on the property today, June 12. Scores of residents currently live in the 75-apartment building.

The Graduate Hotels division is a collection of boutique hotels that AJ Capital has developed in college towns across the country. The collection includes 12 operating hotels and another five under development, according to the company's website. Fast Company ranked the hotel collection No. 50 on its 2018 World's Most Innovative Companies list.

Representatives from AJ Capital Partners would not comment on the President Hotel Apartments transaction when contacted on Monday, June 11.

Residents said that as of Monday they had not been notified of the pending sale but had heard from some of the ground-floor merchants about the conversion of the property, which includes six shops on the ground floor and 70 studio apartments and five one-bedroom units ranging between 250 and 800 square feet on the upper stories.

"We've been kept in the dark. Everyone is devastated," said resident Pemo Theodore, who has lived at the President for three years. "It really is the most amazing community, and none of us will be able to reproduce this anywhere else we go."

Theodore described her neighbors as a quirky mix of eccentric entrepreneurs, artists, retired people, single mothers and political players who, like herself, were drawn to the "funky feel" of living in the old former hotel, where the rooms are tiny, the building creaks and sometimes the apartments can be stiflingly hot in the summer. She said the building's oddities have brought them closer together.

Designed by noted Palo Alto architect Birge Clark, the Spanish Colonial-style hotel boasted a lush rooftop garden, a tiled entryway with an ornate wrought-iron grille, a beamed-ceiling lobby and a grand spiral staircase that climbed all the way to the top floor when it opened in 1929.

According to PaloAltoHistory.org, each guest room had a private bath and featured in-room radio service, allowing guests to choose between channels as they showered, shaved or relaxed in their suites.

AJ Capital renovated a similar historic property in New Haven, Connecticut, last September that included residential units. The developer assisted in the relocation of tenants and paid for moving expenses and security deposits within the first two months after purchasing the 123-year-old Duncan Hotel, according to the New Haven Register.

Theodore said residents at the President Hotel Apartments don't want to leave. Some of them have lived there for as long as 37 years.

"There's no way all of us can get accommodations in Palo Alto, and there's no way for us to find what we're paying here to live in one room," said Theodore, whose monthly rent for her studio is $1,900. Median rent in Palo Alto stands at $2,520 for a one-bedroom apartment, according to apartmentlist.com.

Theodore said tenants have approached a law firm to make sure their rights are looked after.

"The bottom line is people don't want to leave," she said. "The reality is we probably won't be able to do anything about it, but from my point of view, I'm going to do as much as I can until I hit the wall."