It's already happening in Massachusetts and New York, now the next state to turn a former mental health facility into quality real estate is Kentucky. The creepy Waverly Hills Sanatorium in Louisville will become a 78-room boutique hotel with a spa, fitness center and meeting space for business groups. The historic landmark, which once housed tuberculosis patients is reputedly haunted and has been on a variety of televisions shows as one of the most haunted places in the U.S.

Charles Mattingly and his wife Tina, who bought the property in $225,000 for 2001 are planning to keep the ghostly theme of the building during the $18 million renovation. The couple have lived on the property for the last year and have videos that show steaks of light and glowing orbs. The Real Waverly Hills website has a file dedicated to paranormal photos. There is also a slideshow with recent photos that show a building in need of some serious work.. The Mattinglys are planning an eco-friendly hotel with a solar-powered electric system, geothermal heating, a parking structure with a rooftop garden and floors made of either cork or recycled rubber. While the couple are hoping that the ghostly allure will attract some customers they are also hoping that the hotel will attract those who may not be aware of its spooky reputation.

Disney fans take note: the house that was the inspiration behind the Haunted Mansion at Disneyland is up for sale. The Harry Packer Mansion was built in 1874 and is in Jim Thorpe, Pennsylvania, a town that is known for its appreciation of Victorian architecture. Despite appearances (and the fact that it is currently used to host Murder Mystery Weekends), the current owners assure prospective buyers that the interior "is anything but spooky," with high ceilings, Tiffany stained glass windows, marble fireplaces, period antiques and fabrics. The mansion is about 4,500-sq. ft. and is priced at $1.75 million.

[the disney blog via boing boing]

The site of the Danvers State Hospital for the mentally ill in Massachusetts is being renovated by Avalon Bay Communities, Inc. into a complex of luxury condos. Avalon is planning on putting in 497 units in total. They intend to create a "'campus-like environment' with a swimming pool, WiFi cafe and fitness center. Rents will start around $1,400 for a one-bedroom, and about half-a-million dollars for a condo." The 40 or so buildings on the 75-acre property are being demolished, though the central portion of the original 313,000-square foot Kirkbridge building, pictured, is being preserved as an historical monument.

 The hospital was built in the 1870's and has been called one of the "world's scariest buildings." Some people believe that it is even haunted. The architecture is Gothic and the majority of the rooms were built in the style of a dormitory, as the facility was meant to house around 600 patients. During the 1950s, allegations of various shock therapies and lobotomies being used to control the overcrowded facility that held more than 2,000 residents were common and continued until the Hospital was completely closed in 1992. Avalon Bay bought the facility for $18 million.