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Ambassador Hotel near downtown Dallas engulfed in flames

Developer Jim Lake said seeing the historic Ambassador Hotel burn Tuesday was like watching “$10 million in the city of Dallas tax credits go up in flames.”

DALLAS — Updated at 3:45 p.m. with comments from the hotel developer. 

Developer Jim Lake said seeing the historic Ambassador Hotel burn Tuesday was like watching “$10 million in the city of Dallas tax credits go up in flames.”

Lake bought the 115-year-old hotel in 2015 and planned to redevelop it into a mixed-use project with "modern micro-lofts," a restaurant and a bar. 

But the oldest hotel in Dallas caught fire early Tuesday. It took more than 100 firefighters to put out the four-alarm blaze at 1312 S. Ervay St. 

Firefighters responded around 1:30 a.m. to the vacant six-story building. Much of the building collapsed before the fire was extinguished around 5 a.m. Only a shell of the hotel remained by 10 a.m. 

By the afternoon, a wrecking ball was tearing down the outer walls. 

The hotel was vacant for years, but Lake was working to bring the building back to life. His application for historic tax credits was approved earlier this year. 

And Dallas City Council voted last week to close off part of St. Paul Street to make way for the new driveway at the redevelopment. 

“Well it’s hard to look at. I’m still a little bit in shock honestly. It’s a little disappointing the amount of time and energy and effort we put into the project, along with the city," Lake said Tuesday. 

Work had already been started inside the building, including asbestos removal. Construction of the apartments was to begin this year, the developer said. 

The hotel was built in 1904, and Lake said he had been working hard to preserve the history. 

“You just can’t re-build or re-create history. It’s gone," he said. 

But he said he is salvaging as much of the brick and architectural pieces as possible. 

"Whatever is next, I don’t know, but it’s going to be the ambassador something," Lake said. 

The developer expects to lose all the tax credits because the property is no longer a historic site. 

"We just basically kissed over $10 million in tax credit out the window. They're gone," he said. 

Investigators haven't determined the cause of the fire yet. 

One man was arrested near the burned hotel Tuesday afternoon. He allegedly broken into the hotel Monday. 

Lake said break ins have been reoccurring. 

"We've had a series of break ins over the years," he said. "You're just going to have that in an old vacant building." 

A groundskeeper lived on-site in a trailer. The groundskeeper said he woke up to a man yelling outside the trailer around 1:15 a.m. 

"Not 10 minutes later, a huge chunk of the Ambassador Hotel crashed down to the trailer that I was living in," groundskeeper Jerry Nappi said in a written statement. 

This is a developing story. Check back for new information. Download our free WFAA app to stay up-to-date on all news stories in the Dallas-Fort Worth area.