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GREENSBORO — A group of investors led by developer Milton Kern has bought the Biltmore Hotel downtown.

The $1.2-million deal, which closed Tuesday, puts the historic hotel firmly in the hands of local owners for the first time in years.

These investors, under the name of Bogart's Hall Investment Co., have interests in a number of downtown properties, including the Elm Street Center and Foundation Place.

In addition to Kern, the group includes Frank Weiner and attorney George House.

They plan to refurbish and run the hotel.

"It's in pretty decent shape. It just needs some upgrading," Kern said.

The investors hope to make minor cosmetic changes at the 112-year-old hotel in the next six months and apply for tax credits to aid with long-term upgrades, Kern said.

Renovations might help raise occupancy rates at the hotel. Although profitable, the hotel has been half empty at times in the past decade, former owner Karl Lack said.

The average occupancy rate for U.S. hotels is 63 percent, according to the most recent figures from the American Hotel & Lodging Association.

Lack, who bought the hotel in 1998, hadn't put the building on the market. He'd considered offers from out-of-town investors in the past, but he and his wife — both veterans of the hospitality industry — wanted to see the Biltmore in local hands.

"We live in Raleigh, and absentee ownership just didn't work out too good," said Lack, who is in his 70s. "We felt like it needed some tender, loving care and making it into a landmark with local ownership."

The "boutique" hotel already is something of a landmark, being small and old-world in style, a contrast to its large, mass-market competitors. Built in 1895, the building was home to Cone Export and Commission Co., part of Cone Mills.

It went from a business headquarters to a rooming house and, later, a bed and breakfast, before the Baltimore-based Chase Group bought it in 1992, renovated it and renamed it the Biltmore.

The hotel changed hands one more time before Lack picked it up for $800,000, according to property records.

Kern and his partners, who saw a niche in owning the only boutique hotel downtown, hope to preserve the building's character. They are in negotiations to find someone to manage and run the hotel's daily operations, Kern said.

"I know about as much about a hotel as you do," Kern said, adding, "I know more today than I did 24 hours ago."

Contact Michelle Jarboe at 373-7075 or mjarboe@news-record.com