The owners of the closed Lantana Colony Club have reached agreement in principle to convert the property into a spa development, Tourism Minister David Allen disclosed yesterday.

Mr. Allen would not comment on suggestions that a company from Thailand was behind the move, but he did say the project was to develop a `'wellness resort'' at the Sandys cottage colony.

The Minister also revealed that Elbow Beach Hotel is set to spend $50 million on building a new European-type spa, upgrade some units to luxury standard, and build a new ballroom.

Lantana, which closed in 1998, had a reputation for friendliness and excellent service, but owner John Young has struggled for the past three years to find a buyer.

Mr. Allen said if the Lantana sale went ahead, it would tie in with new spa's being built at the Fairmont Southampton Princess, the new Tucker's Point Club, and the one reportedly in the pipeline for Elbow Beach.

He said it would help extend the tourism season into the winter because people would come in colder months for treatment and pointed out that it could lead to fewer layoffs in the off-season.

Mr. Allen said yesterday: `'A small property (Lantana) has an agreement in principle over a development and I'm aware ...it is to be redeveloped as a wellness resort. It's been a hard nut to crack getting suitable owners.

`'It means we can extend the season because people will come in January or February for treatment, and it will also extend employment.''

Paul Leseur, who is related to Lantana owner John Young and is handling the sale, said: `'I can't say anything because we are still in negotiations and it has not been finalised.

`'We've been working over the last six to nine months with several groups and we have a confidentiality agreement and memorandum of understanding with one of them which means I cannot comment.''

Mr. Leseur did say the interested company was from overseas.

Elbow Beach did not return calls yesterday requesting comment.