Media are now wising up to a rumour TV Tonight ran a month ago that The Block producers are keen on The Gatwick Hotel in St. Kilda.
The 64-room 1930s building has been a low-cost boarding house since the 1950s, but attracts some of the area’s more colourful characters who would need to be relocated. It has also been the scene of murders, drug raids and stabbings.
It was taken off the market in October after failing to find a buyer for its pricetag, believed to be over $11m.
Reports now suggest a deal with the owners of the building has been struck in principle and paperwork lodged with lawyers is to be signed off.
TV Tonight has previously tipped future Block sites including South Melbourne 2012 and Richmond 2011.