Most of the vacant Palace Arms Hotel, formerly the Holiday Inn where Ronald Reagan and other notables once stayed, will be demolished, its new owners have decided.

The concrete tower on the east end will stay to be renovated into condominiums, apartments or office space, depending on the recommendations of a feasibility study, according to a press release from Microvest Inc.

Chad Wachter, Microvest's president, said that Microvest and the other two corporate entities that own the property under the name Bridgeport Development planned to sell the property to a local real estate investment group. But that deal fell through. So the next step will be an auction.

"Now, our strategy is to gut the buildings, hold an auction to dispose of the different items in the hotel such as kitchen equipment, tables and chairs," Wachter said.

Bridgeport Development has obtained several bids from numerous contractors to tear down the west portion.

Wachter said the west portion of the property will be developed much differently.

Bridgeport Development, after buying the 7.2-acre property in May, announced it was considering a variety of projects - everything from a medical facility to a high-rise condo complex, restaurants, retails, recreational uses, offices and maybe even a private school.

"(We) have a few clients that are private schools looking for property," Wachter said in a past interview. "We want to develop the property in ways that are going to benefit the community and enhance the whole area."