The site continued to screen movies until 1990, when New York took possession of the building.
The structure, which is now shrouded in scaffolding, has received numerous proposals for its redevelopment.
The theater was leased to the fashion retailer Ecko Unltd. in 2005, but the company backed out of the lease four years later.
In 2012, a company purchased the site for a film presentation on the history of Broadway, but the project was canceled due to financial woes. Others have attempted to restore the building to a Broadway theater, or use it as a space for special events.
The building will now became a 52,000 square-foot retail complex featuring entertainment and restaurant space.
The theater was purchased in the fall by Stillman Development International, which paid a whopping $100 million and signed a lease for up to 73 years.
The building's renovations including lifting the original limestone by five feet. Offsite experts will also restore the theater's proscenium arch and ceiling dome.
Notable features include a 23-foot glass overlook and outdoor terraces on the third and fourth floors.
The developer is looking to secure a major tenant like Apple or Amazon.
The renovations will be completed in 2020, exactly one century after the theater was built.