The RKO Keith's Theatre, a movie palace that has been an eyesore in Flushing, Queens, since being shuttered 25 years ago, will be reborn as a massive housing development, according to an article by Jeremy Olshan in today's edition of The New York Post.

"Although most of the palace's interior was gutted in the 1980s by the building's longtime former owner, Tommy Huang - despite receiving city landmark status - what remains of the lobby will be fully restored as part of a $160 million project," developer Patrick Thompson told The Post.

The 17-story project is planned to contain 357 rental apartments, 360 parking spaces, retail spaces and a senior center, the article said, adding that its three-story-high lobby will be restored.

The article said that "much of the project is based on the 2005 plans by a prior owner, Shaya Boymelgreen, which fell through. Boymelgreen had intended the building to have 200 massive luxury condo units, 'but in the current market that just didn't make sense,' said Thompson, who bought the dilapidated wreck for $20 million. 'We increased the number of units and they will be market-rate rentals, which better fit in with what makes sense for Flushing.'"

The article said that Mr. Thompson said that "with community board approval expected in coming weeks, and assuming ground is broken later this year, the new RKO could be completed in 2013."

Jay Valgora of STUDIO V Architecture, which is designing the conversion and redevelopment of the 1928 building, said "the three-story lobby is all that remains of the theater's original atmosphere, but its grand stairs, painted skies, and flowing fountains will all be brought back to their original grandeur."

"We will put that landmark lobby on stage for all time through the glass, and relate the old and the new -- it's a powerful statement about what Flushing used to be, and where Flushing is going."

Major logistical and bureaucratic hurdles needed to be overcome to make the new design work, including plans to protect the lobby with a steel cocoon during the demolition.

"You have buildings on either side, a high water table underneath, and airplanes approaching La Guardia above," Valgora said. "It's a pretty challenging site, but one that will finally be brought back from the dead."

An article by Sara Polsky today at ny.curbed.com said that the Board of Standards & Appeals will probably vote on the proposed changes in March.

An article yesterday at crains.com by Amanda Fung said that Mr. Thompson "decided to make the proposed RKO Plaza a market-rate rental project because the condo market in Flushing has been slow, and condo prices have yet to recover."

"For years, this RKO Keith site has been neglected and has fallen into a state of severe disrepair, causing concern for local residents," said Councilmember Peter Koo in a statement.

Mr. Boymelgreen had acquired the property at 135-35 Northern Boulevard for $15 million in 2002 but lost in foreclosure last year.

The building's lobby and the grand foyer were designated as interior landmarks by the city Landmarks Preservation Commission in 1984.