Aug. 15--South Beach's most famous mansion -- historical landmark, celebrity palazzo and site of designer Gianni Versace's demise -- is about to become a high-end hotel and restaurant. 

The Miami Beach Historic Preservation Board voted unanimously Tuesday to allow owner Peter Loftin to proceed with renovating Casa Casuarina on Ocean Drive, best known for Versace's 1997 murder. 

The new hotel at 1116 Ocean Drive, slated to open by mid-December, will feature 15 suites and a world-class restaurant. But a stay in the exclusive digs won't be cheap. It'll range between $2,000 and $6,000 per night, rates that rival the country's most luxurious suites. 

"There's a whole level of the market, mostly unseen, of Versace-level friends," said Scott Brush, an independent hospitality industry analyst. "These are extremely rich people. The hotel's success really depends on the ability of the owner to be accepted in that market." 

By comparison, the Mandarin Oriental charges $4,000 a night for its presidential suite, and the Ritz Carlton Key Biscayne charges $3,500. The Shore Club's three-story rooftop suite puts visitors back $15,000 a night, and its private beach house costs $4,500. 

Howard Gross, a historical consultant on the project, said the Island Outpost Company will manage the hotel, but company executives on Tuesday would not confirm their involvement. 

Island Outpost, run by Chris Blackwell, founder of Island Records, specializes in South Beach boutique hotels. Blackwell came to South Beach in 1991 with the re-opening of the Marlin hotel, at 12th and Collins. The company's flagship is the Tides Hotel on Ocean. 

Loftin, a telecommunications magnate from Raleigh, N.C., purchased the house in September 2000 for $19 million. 

At the time, Loftin said he had no commercial plans for the property and intended to just live there. But his visits have been sporadic. 

"Peter would like to return the building to public access," said Gross. "He'd like to have people share in the beauty of the building." 

Neither Loftin nor his partner in the project, Kevin Brady, returned phone calls Tuesday. The details of the project's financing also remain under tight wraps. 

"It's way too early for that at this juncture," said Bob Switkes, an attorney representing Loftin and Brady. "We've just been approved by the board. " 

Gross said Loftin was not concerned about the project's expense but was aiming to create a "six-star" property -- stratospheric aspirations considering five-star is the industry's highest standard. 

The house, built in 1930, is modeled after the Alcazar de Colon in Santo Domingo, a residence built in 1510 by the son of Christopher Columbus and reputed to be the oldest existing house in the western hemisphere. The cost was $1 million. 

In 1992, Versace purchased the building -- then the Amsterdam Palace apartments -- for $2.9 million. He received a green light from the city to raze the Revere Hotel directly to the south to build a two-story, 6,100-foot addition. 

The house, reputedly one of the most photographed sites in America, became a tourist landmark on July 15, 1997, when spree killer Andrew Cunanan murdered Versace on the front steps. 

When Versace first converted the building into a private house, many preservationists bemoaned the fate of the Revere. 

"What's happening right now is the step in the right direction," said Tom Mooney, the city's design and preservation manager. "As a hotel, the building will be made more public." 

Mooney and his staff wrote a favorable analysis of the project, which would retain the facade and mostly require minor life-safety and wheelchair accessibility changes in the interior. 

On Tuesday, project architect Les Beilinson walked the Historic Preservation Board through the proposed changes. On the first floor, a wheelchair ramp will be installed. 

"In addition, a new elevator will be put into the house in the same place where one was installed in 1939. The original location for the elevator is the best location," Beilinson said. "It required the least amount of impact on the building." 

In addition, wheelchair accessible bathrooms and a gift shop will go into the mansion. The current staff quarters are slated to become the kitchen for the restaurant. 

"We have a lot of work to do," said Beilinson, who has worked on 160 restoration projects in South Beach, including the Park Central hotel, the News Cafe, and the original Versace mansion. "We're converting it from a single family home into a hotel." 

By Sonji Jacobs And Cara Buckley 

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