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The windowless interior stairwell of the old Isabella hotel has been painted a bright, if industrial, cream; its 100-year-old corkscrew central staircase has been carpeted in a jaunty leaf pattern and it's now called the Isabella Hotel and Suites.

But the new exterior paint job looks cheap, or maybe it's the vinyl signs advertising cut-rate rooms and the neon in the bay window proclaiming the place Open. Or it could be the patio, filled with plastic chairs and decorated with liquor and beer banners.

In the thirties and forties, the Hotel Isabella, as it was then known, was a fancy place to go; in the seventies and eighties, it was a jazz dive. Now, its soul has been stripped and replaced with the aesthetic of a Howard Johnson.

The new owners -- haunted by the horrors left by hookers and junkies using the derelict space as an illegal crash pad for nigh on a decade in the nineties -- emphasize that you could now perform an operation in the once-filthy corridors. Instead, in this gluttonous city, where we have torn down so much of our history to pave the way for ugly condos pretending to be lofts, they should be glorifying the Isabella's history, both the funk and the funky.

Boutique hotels are a tricky mix. Renos such as the Drake and the Gladstone blend a sense of history with modern design and an emphasis on arts events. The Isabella Hotel and Suites is about renting rooms.

Most guests these days find their way to this downtown bargoon via the Internet; Brits and Yanks, in particular, have been flocking to the $79 room specials at the former flophouse since the landmark reopened its doors in May. But a few have come on a pilgrimage to stoke the flames of their youth at what was once a grand old place.

"People have come in and said, 'We used to spend our wedding anniversaries here,' " new owner Jyoti Kalia says, "or they want to relive their first date. They remember coming here as a teenager at 16. People are coming back for their memories."

Once upon a time, the corner of Isabella and Sherbourne was a suitable address for a prominent Toronto family. The building, which is heritage-listed as a typical Queen Anne late-19th-century style "of varied materials and irregular silhouette," is itself impressive. Built in 1890 by a guy named Jeremiah Bedford, it remained uninhabited for a reason that has been lost to the sands of time until its first owner, George Sears, rented it to a respectable widow in 1896.

Tucked just south of the bridge to Rosedale and northwest of the commercial bustle of Cabbagetown, the corner-lot home made it ideal for conversion to a hotel, and a seven-storey tower was added in 1914.

"Everybody who knew this place," Ms. Kalia says, "they are either in their 30s and 40s or in their 70s." The latter group knew the Isabella in its first heyday before the Second World War. As Ms. Kalia says, "In those days, there were not so many places to go downtown."

Come the seventies and eighties, it was run by a then-elderly, now-deceased woman called Miss Kelly. The basement bar, Under the Izzy, and the main-floor Cameo Lounge were local institutions, most noted for Sunday jam sessions that bred a number of local jazz and blues acts, including the Cameo Blues Band (named for the space), Gordie Johnson's Big Sugar, Molly Johnson, Jeff Healey and more. At one time, the Izzy rivalled the El Mocambo as a live music venue. And a young actor named Dan Aykroyd hanging around the hotel found the material for what would become his Blues Brothers homage.

When I first moved to Toronto in the late eighties (okay it was 1986, but I was really underage), the Isabella was part of a live music and club scene that included the Twilight Zone, Larry's Hideaway, the Diamond Club, Nuts and Bolts and the Gasworks (yes, I'm from Pickering, and we did think it was really funny to order glasses of milk in the scungiest bars we could find). Stilife was alone in what is now the entertainment district.

I remember the dim, intimate if shabby feeling of the bars at the Isabella. Well, the Kalias kept the shell, and the floors are certainly clean enough to operate on, but there is no groove. "We tried to keep old stuff," Ms. Kalia says, "but it was stinky."

She and her husband, Paul Kalia, who together also own Travel Air, a travel agency at Yonge and Wellesley, purchased the boarded-up elephant of a property in 2002 and gutted it. "Druggies, hookers, it smelled of dead bodies," Ms. Kalia says of her first tour of the place, which had been derelict since 1996. Still, the previous owners were hoping to cash in on the boutique hotel boom, and it took the Kalias two years to close the deal and another two to perform a facelift, painting everything shades of cream and beige.

Even the sub-basement has been scrubbed clean. "You couldn't even breathe in there before," she says. "I don't want to remember."

The new lobby is bare-bones function: a card table has been set up for self-serve breakfast. It bears a loaf of Wonder Bread, a tub of no-name peanut butter, a plastic juice jug and a sign that instructs guests not to take food up to their rooms. Instead, they are encouraged to sit on plastic furniture in front of the bar, with a classical music radio station battling it out with a TV blaring Marilyn Denis's dulcet tones on CityLine.

Done right, the place could have kick-started a resurrection in derelict St. James Town (remember, the area was an urban singles utopia in the seventies). But then, I didn't have to clean out what must have been a pretty disgusting mess, so for that alone, the Kalias should be thanked.

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