On Sunset Boulevard, a street pulsing with commercial activity, the Sunset Tower apartment building stands apart, an Art Deco phantom left vacant and decaying after years of neglect.

As recently as 1980, the 14-story building was a thriving apartment house. Its 46 luxurious units were occupied by affluent tenants enamored of the thick walls, European decor and high-rise view of Los Angeles. But the 54-year-old Sunset Tower lost its dwellers and most of its distinctive interior as a parade of owners and developers tried and failed to transform the building, first into a condominium development, then into a hotel.

Now, a group of British investors has decided to take a chance on the Sunset Tower, hoping to restore the gutted building to its former grandeur by converting it into a luxury hotel.

The St. James's Club, an international organization with 4,000 members, is acquiring the West Hollywood property as part of a $25-million renovation project, according to David Becker, an official of the club. Its acquisition would add the Sunset Tower to hotels the club already owns in London and Antigua.

"We want to create a private town house environment for the international traveler," Becker said. "We wanted a building with charisma and the Sunset Tower is exactly what we had in mind."

The hotel could be ready for guests as early as the fall of 1986 if the club can complete the purchase by November and satisfy procedural requirements imposed by the cities of West Hollywood (where the hotel is located) and Los Angeles (which owns an adjacent park where the club hopes to build a two-level parking structure).

Although the St. James's Club hotels are primarily used by members (who pay $250-per-year fees in addition to paying for the rooms), outside guests would also be allowed to use the rooms if they were interested in joining the club. "In most cases, someone who was interested in staying would have the option of joining," Becker said.

According to Becker, the club's founder, financier Peter de Savary, envisions an 81-room hotel that would replicate as closely as possible the ornamental interior of the Sunset Tower when it was built in 1931.

"There will be new room configurations," Becker said. "But we want to bring it back to its ultimate elegance, to the way it looked when it was completed."

Officials of the Abacus Mortgage Co., a Chicago-based firm that owns the Sunset Tower, declined comment on the arrangements of the pending sale. But in May, Michael Klemens, an Abacus vice president in Los Angeles, told The Times that his firm was negotiating with a then-unnamed developer to restore the building.

Clear Path

Becker said the St. James's Club has been trying for two years to acquire the Sunset Tower. But it was not until five months ago, when the last of several lawsuits involving the building was settled, that the club had a clear path.

The procedural problems began shortly after developer James Wohl bought the building from Los Angeles Lakers owner Jerry Buss in early 1979. Wohl, an Art Deco enthusiast who moved into the building's lavish penthouse, said he was "bowled over" the first time he inspected the building.

He found ornamental moldings on every wall. Each bathroom contained expensive etched-glass plaques. "It was one of the most exclusive buildings in Los Angeles," he recalled. "The view of the city was spectacular. When you walked through the halls, you felt this was one of the few buildings in Los Angeles that was going to last forever."

Wohl, whose penthouse suite had previously been rented by John Wayne and Frank Sinatra and organized-crime figure Meyer Lansky, decided the building would be "perfect" for luxury condominiums. Retaining a small interest in the building, Wohl said he sold the Sunset Tower in March, 1979, to Sunset Towers Ltd., a condominium development group.

In the ensuing years, the building changed hands several more times, without ever being fully converted into condominiums or, as later developers hoped, into a luxury hotel.

Some residents were evicted during the condominium conversion; the others, who had invested in their own apartments, left as ownership of the Sunset Tower became clouded by lawsuits and the building decayed. Actor Werner Klemperer, one of the last holdouts, sardonically greeted guests by telling them: "Welcome to Beirut West."

'It Was Pathetic'

By the time Wohl, the building's final tenant, gave up his penthouse last winter, most of the Sunset Tower's distinctive interior features had been removed, either gutted by developers or stolen by scavengers.

"It was pathetic," Wohl said. "Anything that was original is gone."

Conflicting claims about the building's ownership led to a spate of lawsuits and countersuits. Earlier this year, after Wohl and the Abacus firm (which acquired title to the Sunset Tower in December, 1982) settled out of court, the coast was almost clear for the St. James's Club to move.

According to Becker, the final obstacle to the building's sale was removed several months ago when David Lawrence Gray, an architect who retained an option to buy the Sunset Tower from Abacus, sold his option to the St. James's Club.

Gray, who is now working with the club as the architect on the Sunset Tower project, said he is eager to see the building resurrected. "This is a marvelous attempt to restore a great building by somebody who finally has the financial wherewithal to do it," Gray said.

But Wohl, who still hopes that the building can be converted to condominiums, worries that the hotel project could fail in West Hollywood, where seven hotels have been built in recent years and more are planned.

"With all these hotels going up in West Hollywood, I think there's a legitimate fear that the city could be oversaturated with hotel rooms," he said. "I'd hate to see the Sunset Tower open only to close a few years later."

West Hollywood Councilman Alan Viterbi, who has pushed for the hotel project along with Councilman Stephen Schulte, agreed that saturation could be a problem. But past studies of the city's hotel situation have repeatedly stressed a need for expansion, Viterbi noted.

"Besides, I don't think it's a government's responsibility to determine whether or not a business will be successful," he said. "That's up for the investor to decide."

Exempted Renovation

To accommodate restoration of the Sunset Tower, the City Council has exempted renovation of historic buildings from the city's current freeze on building permits. In 1979, the Sunset Tower was granted landmark status on the National Registry of Historic Places.

Although the St. James's renovation project would not require additional permits, plans to add 81 parking spaces would require approval either by West Hollywood or Los Angeles.

On Tuesday, Becker and Gray submitted plans for the building and several proposals for a parking structure to West Hollywood officials. Sorin Alexanian, a county planner working under contract to the city, said St. James's representatives discussed plans that called for a parking garage to be built either on the hotel site or on an adjacent site on William S. Hart Park, a small, little-used park owned by the city of Los Angeles.

Before the garage could be built on the hotel site, Alexanian said, an environmental impact study, public hearings and a conditional-use permit issued by the West Hollywood City Council would be required.

But club officials hope to build the garage on Los Angeles' Hart Park. Under the St. James's Club proposal, a new, upgraded park would be built on the roof of the garage. That proposal would require approval by the Los Angeles Recreation and Parks Commission, which gave tentative permission two weeks ago.

"The park is not critical to us," Becker said, "but we thought it might be a perfect way to not only meet our need, but the city's as well."