LAWRENCE - The owner of a former nightclub building where officials say yesterday's 7-alarm South Lawrence fire originated, said he has "no idea" how it started.

"There's no way, we (did) not have anything in there that can generate heat," said Geraldo Torres, 45, of Methuen, owner of the three-story building that once housed the Millennium nightclub at 44 Parker St.

State Fire Marshal Stephen Coan said the blaze appears suspicious, but it was too early to determine the cause.

Torres said he was renovating the building and he shut down the power every time he left at night. He was told the fire started on the second floor, and he thinks somebody broke in and caused it, he said.

The nightclub has not been open for about three years. Torres said he and his wife, Nereyda Trempe, have been working in the building up to 15 hours a day, preparing to turn it into a bar and restaurant with a Mexican or Italian theme.

Building Inspector Gregory Arvanitis said Torres had all the proper permits and everything seemed to be fine and there did not appear to be any fire hazards.

"We were just in here on Friday," Arvanitis said. "Everything looked really good."

Torres bought the building for $260,000 and began renovating it two months ago, and was about three months from opening the new establishment. He spent another $300,000 on the building after buying it, and did not have insurance, he said.

"We made a mistake. We started renovating before getting the insurance," he said.

"Nothing that's in the building code says you have to have insurance," Arvanitis said.

Torres bought the building about a year ago. He got a mortgage and had insurance at first. He had to wait until the city granted his permits to begin the renovations. That happened two months ago. Because it took him so long to start the renovations, he ran out of money and stopped paying the insurance company before he began the work, he said.

"By the time (we) got the permit from the city, we (were) running out of money," he said.

The insurance was cancelled before he got the permits two months ago, he said. He was in the process of finding a cheaper insurance company at the time of the fire, he said.

Torres spent $2,700 a month for the loan. He said he put up his house and car against it, so he is afraid he will lose both.

Asked what he plans to do, Torres shook his head. He appeared to hold back tears while the remains of his venture smoldered.

Torres said the last time he was inside the building was around 7 p.m. Saturday.

He and his wife said they learned of the fire around 7 a.m. yesterday when someone called to tell them. They didn't know at that point that the building had burned to the ground, they said.

The building had an empty apartment above the storefront.

Because the structure was being renovated, it was gutted and completely open on the inside. There were no walls to slow the flames, the building inspector said.

"It was like a match stick," he said.

Torres has built houses in the past, but Parker Street was his first commercial project, he said.