The decision is part of the company's expansion strategy after going public earlier this year. Morgans is acquiring new hotels and turning its successful one-offs, namely the Mondrian and Delano hotels, into full-fledged brands.

It bought the 194-room James Hotel for $46.5 million just two years after the property opened in downtown Scottsdale to rave reviews but also complaints about snooty service and loud, partying locals.

Designer Benjamin Noriega-Ortiz is transforming the hotel into a Garden of Eden, using the themes of temptation and sensuality throughout. He says he drew inspiration from "all the swingers and sexy people around."

Morgans credits itself with starting the boutique hotel concept that is so popular today, with hallmarks such as chic design, unique buildings, low lighting and moody music back in 1984. Ian Schrager and Steve Rubell founded the company after creating Studio 54.

"If imitation is the highest form of flattery, we are flattered all over the place," Miller said. "We had a community of loyal followers that loved our properties, and a whole other part of the community at large that didn't understand what we did, how we would make money, who would want to stay there.

Interior design heavyweight Andrée Putmanwill update the original Morgans Hotel that opened in New York City in 1984. Noriega-Ortiz is busy remodeling the Mondrian Scottsdale.

The look will be a departure from the Ikea furniture and retro patterns of the old James. Instead of the familiar, homey furnishings that have permeated the lodging industry to make guests comfortable, the Mondrian is planning some modern designs and monochromatic rooms.

There will be no signs on the building, at Indian School and Scottsdale roads, and the façade will be as white as the city's design code will allow. That's the trademark look of the original Mondrian in Los Angeles.

Two enormous topiary doors beckon guests into a flesh-colored lobby. One bar will be apple-red from the floor to the furniture and open only to guests. The Mondrian's signature Skybar will be black as the nighttime sky and open to anyone.

Morgans has commissioned several sculptures to place throughout the hotel, and it's capitalizing on outdoor space. The property will be lush, open and airy despite its downtown location.

"What we're trying to do with the design of the Mondrian there is create this urban oasis," Noriega-Ortiz said. "The advantage in Arizona is the James Hotel is located in a place that has a lot of outdoors. We're treating the outside like it was inside "

Going public has given Morgans the resources to expand and renovate at a faster rate, Miller said. The company will unveil an upgraded Delano and the Mondrian Scottsdale around December.

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