A Reno developer plans to transform an eastside eyesore — Reno’s old Fire Station No. 2 at 495 Morrill Ave. just off east Fourth Street — into an eye-popping showplace.

Come July, the faded beauty will strut its art deco design in firehouse red, trimmed with ebony — its sunburst motifs agleam in yellow gold. Neon will flash its new name: 11 at the Firehouse.

Kelly Rae and Pamela Haberman, owners of HabeRae Investments, joined forces with Shu S&E Inc. (owned by longtime Seattle-based friends Robert and Jean Shoemaker and their son Fritz Shoemaker) to form the project’s working entity: Firehouse 495 LLC.

The old firehouse was trashed after years in use as a men’s homeless drop-in shelter that closed in 2005. Locals called it the “bug building” because of a matte black Volkswagen spider sculpture that had long stood sentinel atop the roof.

But at 11,500 square feet on a half-acre lot, with two stories and a basement, the concrete monolith designed in 1946 still had some life left in it, Rae figured.

And, it has location, location, location. Not only is it just a short distance from downtown venues, but a new post office will be situated on a vacant lot to the north.

Tenants have already stepped up. Eddie Reynoso will open a coffee shop, the Firehouse Café; Jacqueline Maffett plans Blackjack, a place for stylists to do internships; and Salon 7 owners Jennie O and Tonya Marini plan to expand their business after relocating from Cheney Street.

Meanwhile, artists-at-heart are stepping up to speak for space in the eight loft units upstairs. The ground floor will house one large studio unit.

Although Rae, whose Reno roots date back to 1960, knew of the firehouse — as a schoolgirl, she’d toured it on a field trip — a news blip alerted her to its potential.

“I heard: ‘Reno can’t get rid of the bug building. The city’s held two auctions, but got no takers,’” Rae recalls. “I called the city; they wanted to meet with me within the hour.”

Firehouse 495 LLC paid $490,000 for the building, with a $40,000 down payment, which comes to $48 per square foot. With remodeling costs expected to approach $500,000, Rae says, “We’re into this property for $1 million.”

Still, she says, the investors can expect a 10 percent per year return as the combined residential and commercial rents are expected to be $12,000 per month.

But income isn’t the sole reason behind Haberae projects. When the developers committed to the condo project Eight on Center, homeless camps littered the vacant lot and sprawled across Center Street onto another weedy, dirt yard.

“Everyone thought I was crazy, but we went ahead and did it,” says Rae. “If you went there now, you’d not recognize it. Everything’s clean and tidy.”

Rae calls her development philosophy, “Pride of ownership. One building at a time.” Of the old firehouse, she says, “If you can see past the graffitti and broken windows, it’s a beautiful building. Quality renovation returns respect to that building. It brings responsibility back to that street and that community. It’s not going to change everything, but it will change this corner.”

The Firehouse 495 renovation crew includes Ken Bartlett of Bartlett Architecture along with Darin Murphy of MB Construction, working with local plumbers and electricians.

The building, says Rae, needs a new electrical system, sprinkler system, heating ducts and working mechanicals. Plus new plumbing for nine kitchens and baths — and the coffee shop. The work requires the drilling of 100 four-inch holes for venting and piping. And the utilities will get some respect — the silvery spider web of conduit will be exposed to keep the industrial feel, as seen in loft projects in the major metro areas.

Rae returned to her hometown after a career as an agent with the federal Drug Enforcement Administration turned developer. The first project, built in 2001, was modest: A duplex on West First Street, subsequently copied on Wheeler Street. But after building the Eight on Center condo project, Rae says, “I wanted to do an old building.”

But before buying the old bug building, she wanted to test the waters.

“To see if people would respond, I posted a notice about the project on Craigslist,” she says. “Web site hits jumped from 30 to 800.

So I knew the interest was out there.”