In 2002, Millennium Partners agreed to restore the Paramount's facade, marquee, and vertical sign in exchange for city approval of their adjacent Ritz-Carlton Towers project.

The city's hopes that the site would be developed by the Cambridge-based American Repertory Theater were not fulfilled.

The $77 million project involved the renovation of the building and adjacent parcels of land into a complex containing a 550-seat theater, a Performance Development Center, a student residence hall, a 125-seat black box theater, a 170-seat film screening room, eight rehearsal studios ranging from 700 square feet (65 m2) to 1,900 square feet (180 m2), six practice rooms for individuals and small groups, a sound stage for film production classes, a scene shop, several classrooms, a restaurant, and up to a dozen offices for faculty and staff.

[3] Acentech Incorporated consulted on the acoustical design of the facility, providing guidance on room acoustics, sound isolation between the stacked spaces on the tight urban site, and mechanical system noise control in the historic building.

On March 18, 2010, Emerson College celebrated the grand re-opening of the Paramount Theater with Mayor Thomas Menino.