After lying abandoned for years, the non-profit organization CityVest purchased the hotel and demolished the 14-story Plaza tower portion and four-story connecting building in 2007 in an attempt to make the property more marketable to developers.

It was said: "The hotel was planned as a brick Victorian Chateau whose high roof would have risen in two tall peaks, covered with several rows of gabled dormers" [4] The design was then changed to something more modern for the time, and the building's facade facing River and Market streets was changed from brick to limestone.

By 1920, a key player in the Hotel Sterling's fortunes was Homer Mallow, who became a majority stockholder and president of the company.

Designed by the New York architectural firm of Warren and Wetmore,[5] the fourteen-story structure was twice the height of the Sterling.

A long, wide hallway flowed from the original Sterling, through the connector building to the tower, and was called "Peacock Alley", after a similar area located at the Waldorf Astoria Hotel in New York City.

After World War II, the anthracite coal industry in Northeastern Pennsylvania began to decline.

The former Plaza tower hosted students and also some permanent residents, many of whom rented rooms that were converted into "efficiency" units.

By the 1980s, the college students had left, and the Sterling could no longer compete for transient guests, if not permanent residents and catering business.

The fire and lack of maintenance quickly took its toll on the buildings, which then suffered from vandalism, leaking roofs, and the freeze-thaw cycle the area experiences.

However, CityVest failed to mothball the original Hotel Sterling, and as a result the building stood in a state of great decrepitude, with restoration costs estimated at up to $35 million.

During July 2011, CityVest indicated that they failed to attract an investor-developer to the Sterling site, and now wishes to demolish the remaining original 1897 hotel, and local politicians agreed with this course of action.

While the water eventually drained, it left several inches of mud in the basement, and a subsequent inspection by local engineers determined that parts the building may be in danger of collapse.

[8] The city of Wilkes-Barre announced plans to divert Market street traffic away from the Sterling as reported by the Times Leader.

On November 17, 2011, Wilkes Barre City Council voted unanimously on a $1 million project to demolish the Hotel Sterling in February 2012.