Ariel Sands has severed its ties with the Hilton group and will move forward with its multi-million dollar redevelopment with a new company, the Mid-Ocean News can reveal.

A hotel spokesperson was not available for comment yesterday but it is believed that the South Shore Devonshire property has formed a new partnership with Regency Club.

Ariel Sands first announced its intent to replace the existing hotel and cottage colony properties with a $170-million development featuring vacation villas, a world-class spa and fitness centre and restaurant and conference centre last year.

At that time, two-time Oscar Award winner Michael Douglas, a member of the Dill family that has owned the resort for the past 50 years, spoke highly of the Government's support of the venture: "As you know the cottage colony tourism business has been pretty rough for the last 20 years," he said.

"We think we have presented to Cabinet a well thought-out plan, not only for tourism, but also what is best for Bermuda. It encompasses additional rooms and beyond that training for Bermudians, employee housing and a number of issues that I think will be very positive. I appreciate very much the response from Cabinet."