A RUNDOWN area of North Hamilton could be transformed into a five-star hotel with a world-class restaurant and upmarket apartments if developers get their way.

Stonehaven Development Ltd. has submitted a proposal to turn the former Canadian Hotel site on the junction of Court and Reid Streets into a ten-storey luxury living complex for visiting business travellers. The plan will occupy around 23,000 square feet at ground level and include 39 apartments, office and retail outlets, a restaurant and spa facilities.

Although the design breaks City of Hamilton Plan recommendations, which states that new developments are not allowed to be more than seven storeys high ¿ developers have pointed out that the building will not exceed 138 feet ¿ the height of the Hamilton Cathedral roof ridge.

Developers also pointed out that there will be a series of "set backs" incorporated into the design, reducing the impact of the building at street level.

The site currently houses a number of small retail outlets as well as the former Canadian Hotel. Owner Ted Powell had rented out that property as affordable housing, but was forced to order around 60 tenants out in February 2006 after the building was deemed unsafe. It has remained abandoned ever since.

In a letter to the Planning Department submitted last week, Aideen Ratteray Pryse of ARP Consulting Services wrote: "The extant planning permission on the property is for an office building with part-retail use on the ground floor and residential use at the penthouse level.

"At this in-principle stage, the combination of studios, one- and two-bedroom units is not finalised. However, the aim is to provide five-star living accommodations with full hotel amenities.

"The hotel amenities include a world-class restaurant, concierge and exceptional spa experience.

"In line with the Bermuda Government's and Corporation of Hamilton's wish to rejuvenate the Court Street and North Hamilton areas, the applicant's proposed five-star condominium hotel no doubt will be the catalyst for further investment in the area. New commercial office spaces are shifting to the east side of Hamilton and ideally residential spaces and associated amenities should follow along with this exciting project.

"Our research strongly indicates that both the proposed product and location are extremely desirable for this type of development. The target population for the condominium hotel is the business person that is on island either for a brief stay or for two or three years and who desires an urban living option where work, shops, dining and entertainment are all within walking distance."

Highlighting the advantages of the proposal, Mrs. Ratteray Pryse said: "New company formation continues unabated in Bermuda, which creates a demand for housing that cannot continue to be met by the development of vacant land. City living is the next step in Bermuda's housing evolution and maturity."

She added that the new complex "does not take vacant land away from Bermudians. Instead it encourages an efficient use of land through the rehabilitation of previously developed property and an emphasis on height rather than sprawl".

She added that the finished building would not impact views of the Cathedral but would "enhance the pedestrian experience, replacing worn-out shop fronts with an inviting restaurant, lobby and lounge". The condominium hotel will be managed by a top tier international brand that will bring excellent exposure to the island.

"Bermuda can no longer afford to indiscriminately lose green space to development. Concentrating development in Hamilton on brown field sites where residents and visitors can walk to their destinations is the logical next step," Mrs. Ratteray Pryse wrote.

"To efficiently and effectively achieve viable developments, buildings of greater height may be required ¿ buildings that contribute positively to a skyline that includes the Cathedral profile but is not necessarily dominated by the Cathedral profile.

Detailing the set back element of the design, Mrs. Ratteray Pryse said the ground floor of the hotel will be set back eight feet from the street. A further six storeys will be set back 15 feet, the eighth and ninth floors will be set back another 15 feet, while the top storey would be set back an additional 25 feet. And she emphasised that the project, although ten-storeys high, would not exceed the 138-feet high Cathedral roof.

"Such exceptions should be made for uses that play a part in making Hamilton the vibrant, livable city we seek - for example residential, tourism, cultural and entertainment uses," Mrs. Ratteray Pryse concluded.

The site of the new development is within the boundaries of the Economic Empowerment Zone, an initiative set up by Government last year to boost business in North Hamilton. Businesses and residents within the EEZ qualify for preferential borrowing rates, tax incentives and other development incentives.

However, the height of the new development could cause concern among environmentalists if planning permission is granted. Earlier this year Government came under fire after approval was granted for a ten storey development on King Street. Former head of Government's Sustainable Development Roundtable Stuart Hayward accused Environment Minister Neletha Butterfield of "compromising practices designed to safeguard Bermuda's uniqueness in order to cater to the demands of the wealthy and the powerful".

And the Bermuda National Trust also expressed its concern over the decision, calling on Government to establish "a coherent and cohesive policy regarding higher building heights".