DAWSON CITY For someone having to spend more than $1million restoring an entire floor and one wing of a hotel, Karen Jenkins sounds remarkably enthusiastic as she showed off the bare bones of the new second floor of the Eldorado Hotel earlier this month.

'This was originally 11 rooms plus the two suites that are all right. The 11 will be replaced with six large suites, one of which will have a four-person jacuzzi.'

The new hallway will run down the back of the building instead of the more traditional hallway in the middle, between the rooms.

'Hence not so many windows on the back end, but lots on the front with the new rooms.

'It's coming along very well, considering it's been (almost 10) weeks.'

On April 12, a second floor room of 'the Eldo' caught fire when a frayed electrical cord ignited the bed and the room.

Volunteer fire crews kept most of the fire damage to the second floor, though the south wing extension, containing rooms, the kitchen and dining room, were heavily damaged. The bar, at the other end of the building, had to be redone due to water damage.

Nevertheless, the fire team did a tremendous job saving the rest of the building. That's especially true considering that fire safety building regulations in the late 1960s had provided the blaze an easy building to spread in.

Restoration began almost immediately, with Karen and husband Peter Jenkins' priorities being to demolish the damaged floor, get the building framed clad to the weather and a Third Avenue facade in place before Dawson got too far into its brief tourism season.

'Plus with the (Robert Service) school right there and that whole back end burned, it was really important to us get that covered,' said Karen.

The new section has a red trim highlighting the windows and doors. Karen says it was a bit of struggle to persuade Peter to try this experiment, but it seems to be working well.

As for the cost, Karen Jenkins laughs when she remembers the initial damage estimate of $500,000-plus.

'We just looked at each other and said No way,'' she recalls.

Of the insurance settlement, she's keeping that confidential at the moment, and it isn't yet finished.

'Let's just say, it's been challenging, but they have been somewhat co-operative.'

Peter and Karen Jenkins have had to spend a lot of money on the hotel in the last two years, starting with the repayment of a two-decade-old government loan that was finally called in last year.

'The positive end of it is that we are getting to rebuild and put some new things in. It's turning out to be a beautiful building. I'm very happy with the front.'

The Jenkinses can rent only four rooms in the main building yet, so the business has been surviving on those, the 24 rooms in the annex building, and the six in the Yukon Hotel on Front Street while the construction work continues.

The bar was functioning again, though upholstery work was still under way, and Karen expected to be able to move the reception desk back into the main lobby by month's end.

'That first couple of weeks were horrendous,' she said. 'Driving into town from Whitehorse and having no idea what to expect. It was pretty devastating when we first came inside the building. My knees went weak.'

She credits her husband with keeping her spirits up and driving the reconstruction effort. While the interior work may have to wait on time and money, she's not sure her husband has the patience to let it wait long.

'Peter's a very determined man, as we all know. He's been the push behind this. He's very motivated these days.'