The Garden City Hotel is getting a makeover; some of its 272 rooms started reopening last week. Garden City Hotel

The Garden City Hotel is working to wrap up a major overhaul costing more than $40 million, the latest of several rebuilds in its 100-year-plus history.

The renovation of the hotel—some of its 272 rooms began reopening last week—is one of the latest signs of new investment in the Long Island village about 20 miles from Manhattan. One of the country's first planned suburban communities, Garden City has attracted some of New York City's most prolific real estate families, including the Pilevskys, the Moinians and the Albanese.

Morris Moinian, who is the brother of well-known Manhattan developer Joe Moinian, has led the Garden City Hotel project. Morris Moinian heads up Fortuna Realty Group, which purchased the Garden City Hotel in 2012 and also has developed The Dylan Hotel at 52 E. 41st St. and Chelsea's Hotel Indigo at 127 W. 28th St.

"Money has been no object," Mr. Moinian said. "I always had my eyes on it. It's one of the most iconic trophy assets in the eastern United States."

The Garden City Hotel opened in 1874 and was the largest and most exclusive hotel on Long Island. Designed by architect Stanford White, the building gained prominence when Charles Lindbergh stayed there before his trans-Atlantic flight to Paris in 1927.

Over the years, the hotel burned down and was rebuilt. It also was razed in 1974 and rebuilt again. Other guests have included John F. Kennedy, Margaret Thatcher and Hillary Clinton.

Rooms were shut during the renovation, but the hotel restaurant and meeting rooms stayed open. Some rooms opened up last week with nightly rates ranging from about $200 to more than $400, depending on demand.

Garden City itself, part of the town of Hempstead, was envisioned as a suburban luxury community by millionaire Alexander Turney Stewart in 1869. He established it by buying thousands of acres of land. On them, big houses, boulevards and the Garden City Hotel were built.

The area has gone through a several economic ups and downs. Nassau County's overall vacancy rate—16.2% in the fourth quarter of 2013—is well above Manhattan's, which was 11.1%, according to Jones Lang LaSalle, the commercial real estate company. But the Nassau rate was 0.6 percentage points lower than a year earlier.

Developers say they've seen an improvement in recent years. According to the Albanese Organization, which began acquiring buildings in Garden City in the late 1990s, some office rents are in the mid-$30s a square foot, about 20% higher than 10 years ago, according to Russell Matthews, an Albanese principal.

Albanese has ownership stakes in eight commercial properties on Franklin Avenue. The company recently signed its tenth lease since last May for a total of 43,725 square feet of office and retail space. Tenants signing office deals include First Republic Bank and the law firm Harding Burke & Hogan.

Philip Pilevsky's Philips International spent $18.5 million in late 2012 to purchase two medical office buildings that total 77,620 square feet at 520 Franklin Ave. and 601 Franklin Ave., also evidence of the resurgence. Philips has started to convert the buildings to condominiums to sell units to businesses.

Philips also owns two other buildings in Garden City, a residential rental building called Hampshire House that it bought in 2004 and a retail building at 730 Franklin Ave.

"I believe Garden City is definitely coming back and it's on its way to being what it once was," said Seth Pilevsky, co-president of Philips International and Mr. Pilevsky's son.