The Palace Inn sweepstakes are over: Less than two years after buying the landmark Monroeville hotel, Squirrel Hill developer Cozza Enterprises is selling it for $19 million to the expansion-minded University of Pittsburgh Medical Center.

Yesterday's news ends years of speculation about what will become of the 35-year-old hotel, which started life as a Howard Johnson and hosted boxing matches, concerts and countless wedding celebrations. UPMC will turn the 12-acre Palace Inn property into a new adult outpatient facility, with room to accommodate an ambulatory surgery center, an urgent care center, physicians offices, expanded pediatric services and more.

UPMC expects that renovations of the existing building will be completed by 2010. Also yesterday, UPMC closed on the purchase of a sloped, 3-acre parcel just behind the Palace Inn it could use it for parking.

Meanwhile, Craig Cozza, head of Cozza Enterprises, more than doubled the $7.5 million he paid for the property in 2006, when he bought it from the family of the late Al Monzo, the Inn's pugnacious proprietor.

Since the purchase, neighbors had wondered what would become of the old hotel, which sits at one of the busiest intersections in the state. Mr. Cozza proffered a proposal for a new hotel with a casino and water park attached. Last year, he applied for a "resort" casino license on the hotel's behalf, hoping he'd win the rights to install 500 slot machines. But the state gaming board questioned whether the hotel met the requirement of being at least 15 miles from the proposed Majestic Star casino on Pittsburgh's North Shore.

Now, the point is moot, as yesterday's deal means that Mr. Cozza has withdrawn his casino application. It also means that the Palace Inn will never again become a venue for big dinners and concert gigs.

It's a disappointment, though a minor one, for Chad Amond, president of the Monroeville Area Chamber of Commerce.

"We embrace UPMC coming," Mr. Amond said. The intersection of Routes 22 and 48 is "Monroeville's equivalent to 42nd and Broadway," and it's good that the building will be returned to a productive use -- but not to the property tax rolls, since UPMC is a not-for-profit business.

The jobs, 250 of them at the outset, also are a win, though a small dent in what will be lost when Westinghouse vacates its Monroeville campus for Cranberry. Those 250 positions are in addition to the staff of 200 UPMC employees already scattered among other Monroeville offices, which will be consolidated at the Palace Inn.

Elaborating on the purchase, UPMC Executive Vice President Elizabeth Concordia said in a statement that "our patients and physicians in the eastern suburbs want convenient access to our specialty services." Unspoken was the desire to get a more visible presence in an area where competitor West Penn Allegheny Health System operates its Forbes Regional hospital campus, about a half-mile down Route 48 at Haymaker Road.

UPMC apparently had been scouting locations for months. Mr. Cozza said his company had been receiving overtures since last year from Oxford Development Co., but didn't realize that Oxford was negotiating on behalf of UPMC until a few weeks ago.

Mr. Cozza said the timing was right to unload the property, given the tighter lending restrictions that might have made it more difficult, and more expensive, to finance the hotel, casino or water park.

"Our return kept going down, and our risk kept going up," he said. The cash infusion from UPMC means that Cozza Enterprises should be able to move on some long-planned projects, including a condo building next to St. Mary of the Mount church on Mount Washington. He said that Grandview Avenue project would start this summer.

It would have been nice to see The Palace Inn returned to its former glory as a community gathering place, but as a developer, he said, you can't get tied up in the nostalgia of a place.

"We try not to get married to any of our developments and investments.," he said. "You got to follow the market."

And the market, as it often does in Pittsburgh, led him to a deal with the largest hospital system in Pennsylvania.