June 23, 2009 --Owners of Atlanta's legendary Clermont Motor Hotel, best known for the gritty strip club housed in the basement, were working Tuesday on a deal to avoid foreclosure.

The 85-year-old Ponce de Leon landmark has been on the market for several months, but a buyer has yet to be found in what remains a brutal real estate market.

However, a deal could be in the works to at least temporarily stave off a forced sale, said John Mansour, an Atlanta lawyer working for Fairway Capital, a New York real estate firm that holds the loan on the building.

Fairway continues to negotiate with the building's owner, Atlanta-based Inman Park Properties, Mansour said.

"At the moment, I hear there is a good chance it may be taken off" the foreclosure rolls, Mansour said. "With real estate, these things usually go down to the wire."

Inman Park Properties, which is delinquent on the loan, did not return a call for comment. Gene Kansas, who is selling the building for Inman Park Properties, said the company told him the building won't be foreclosed.

The Clermont's list price is $6.5 million, Kansas said.

The Clermont Motor Lodge was built in 1924 as an apartment building and was turned into a hotel in 1940. The 108-room hotel offers spartan amenities -- there's no cable TV -- at cheap rates starting at about $35 a night.

The five-story hotel stands out among the low-rise buildings lining Ponce as it runs east of downtown. But the Clermont holds an outsized place in Atlanta's nightlife scene for what happens on the bottom floor at the Clermont Lounge strip club.

The dank, smoky strip club is known for dancers old enough to be many patrons' mothers, or even grandmothers. The most famous dancer, Blondie, is known for reciting poetry as she plies her trade.

In recent years, the Clermont has been adopted by urban hipsters who pack the venue for DJ dance parties. Recently, the actors Woody Harrelson and Bill Murray were seen taking in the sights at the Clermont.

Even if the hotel falls into foreclosure, the Clermont Lounge should stay open, said attorney John Ayoub, who along with Mansour represents Fairway Capital.

"There's no reason to stop them," he said. "They have a business. They make money. They pay rent."

Kansas, the Clermont's listing agent, is holding a design competition to encourage ideas of how to restore the iconic building.

In true Clermont fashion, Kansas is planning a party on July 30 to announce the winner, complete with a live band.

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