As we have seen on numerous occasions, restoration or renovation of older properties is often precipitated by the threat of imminent destruction. In 1987, the O'Dwyer Block on the south side of Water Street was slated for demolition because of serious deficiencies in the building's structure. The block, however, had recently been designated as part of a National Historic District, and a groundswell of support emerged to save the structures. Once engineers had determined that the block could be considered as two buildings, Pat Thompson made plans to purchase 303-305 Water Street and restore the premises the family business had occupied since 1912.

The building was originally constructed in 1859, and housed Lash's Hotel and Bakery. Later, the premises became the Railway Hotel and eventually, the first Arcade Store. From 1912 until 1957, it was the location of Roper & Thompson, the partnership which in 1957 became Thompson's Jewellers.

In 1987, with assistance from the Heritage Foundation of Newfoundland and Labrador, and the City of St. John's, Pat Thompson contracted architect Angus Campbell to oversee the ambitious restoration project. The structural work was extensive: a new foundation was required, and windows and sills had to be replaced. On the interior, the beams and brick were again exposed, and ceilings were raised to their original height. In restoring the facade, meticulous attention was paid to decorative detail: painted brick was exposed, transom windows which had been closed over were again featured, and handmade wooden doors and etched glasswork were installed. Irish jewellery store window boxes were added to complete the look. After months of work, in September 1989, the "present" to the City was unwrapped.