Club Med wants to re-open 100 rooms in the St. George's hotel that has sat closed since 1988.

And in its efforts to find a buyer, the company has slashed its asking price to $13.5 million from $32 million, Club Med Inc. secretary and treasurer Mr.

Joseph Townsend told The Royal Gazette yesterday.

But Government, which is taking Club Med to court to reclaim the property, is not jumping at the offer.

"Litigation has started,'' Works and Engineering Minister the Hon. Leonard Gibbons said yesterday. And on August 23, "we have a court date.'' Mr. Gibbons said the Tourism Minister would make a recommendation to Cabinet on Club Med's offer. But he confirmed that a similar request last September to partially re-open the 300-plus room hotel was turned down.

"There are a number of defects in the hotel that under the lease they had to repair,'' Mr. Gibbons said. "To my knowledge, none has been addressed.'' Mr. Townsend said Club Med has hired top American hotel and resort broker Hodges, Ward, Elliott to sell the property and has been advised it would be easier to attract a "top flight'' buyer if the hotel could be sold as a going concern.

"If something is closed you have people who say, `I don't want to buy it -- it doesn't work','' Mr. Townsend said from New York. "It is always easier to sell a going concern.'' Club Med would spend just over $1 million to refurbish 100 rooms and reopen as "a more traditional, Bermuda-style hotel, in the spring of 1996,'' he said.

The company wants to include the Bermuda property in its 1996 brochure, which is published in September, he said.

Mr. Townsend said Club Med retains nine full-time employees and already spends more than $1 million a year to maintain the property. And while he did not want to discuss matters that were before the courts, he felt the company was in compliance with the lease on the Government-owned land.

"We have maintained that property extremely well,'' he said. "If you go around the grounds, it's almost a tourist attraction. We've kept the beach clear. We've cleaned it every day.'' "They cut the grass,'' Mr. Gibbons said. "I don't know what other maintenance they do. We're saying, you've got to put the premises in order.'' Mr. Townsend said the reopening would not only help Club Med and the Town of St. George to market the hotel, it would create jobs and "result in the availability to Bermudians of all the facilities of the hotel which include the pools, the beach, tennis courts, and night clubs.'' Mr. Townsend said Club Med has had great difficulty selling the hotel, which closed just as the eastern United States was moving into a recession. The first serious buyer, in 1991, could not come up with the deposit.

Later, the Tourism Department came up with another interested buyer, who again could not produce the cash.

Today, "we have an interested buyer,'' but "it doesn't move as quickly as everyone would like.'' Mr. Townsend said the price had been reduced seveal times and the hotel was now being advertised for $13.5 million. "We're taking a substantial loss on the property -- substantial,'' he said.