The Hotels second major renovation began in 1985, and continued until the early spring of 1986, surpassing seven million dollars. The new addition to the hotel was added at this time, including a grand Ballroom and Promenade on the first floor and guest rooms on the second through fifth floors, bringing the number of rooms to around 104. An atrium was added on the third floor, with skylights installed on the roof, along with the installation of new guest elevators, and the creation of the Library.
The Kaltenecker building, which is located to the right of the hotel on Market Street, was incorporated into the hotel at this time. Many antiques from other places around the country were brought in to give a historical feel to the hotel at this time period, and lots of dark stained wainscoting was added throughout the building. Some could say that this renovation sort of gave the hotel a Mississippi Riverboat sort of feel inside.
The Kaltenecker building was built by John Kaltenecker at the same time that Chancellor was building the Blennerhassett Hotel. This is why when you are on the outside of the Hotel, the Kaltenecker building has the same architectural style as the Blennerhassett Hotels, because Kaltenecker had the same architect do the same architecture on his building that Chancellor had done on his new hotel building. On the third floor of the outside of the building the name Kaltenecker can be seen inscribed on the sandstone. The hotel had the name on the sandstone rein scribed around the time of the third major hotel renovation, due to the fact that time had worn away the name and people wondered what the significance of the name was.