Building from 1924 to be torn down for a hotel?

A company named L55 ehf. has applied to the City of Reykjavik to tear down two buildings on the main shopping street, Laugavegur, to make room for a new building containing a hotel and a bar/restaurant.  

The building, which was constructed in 1924, and measures 643 square metres now contains shops, a restaurant and one apartment. 

The proposal is for a new building measuring 2.071 square metres with accommodation for 116 people. 

The applications have been forwarded to the city planning council.