Premier Ewart Brown announced yesterday that Government was in the final stages of negotiations for a new luxury hotel to replace Club Med – just a day after Opposition Leader Michael Dunkley predicted that an announcement about the site would be made in the run-up to the election.

The Premier told a press conference that plans to transform the derelict venue overlooking the ocean in St. George's were well on their way and that demolition work would begin before the end of the year.

But the United Bermuda Party dismissed the announcement as "electioneering – pure and simple".

Dr. Brown was joined at yesterday's press conference by Carl Bazarian – the third developer in four years to be linked with the site – who said a "low-rise, elegant hotel" of no more than three storeys would open there in spring 2010.

See a video report of the press conference at www.theroyalgazette.com.

Mr. Bazarian, of US investment firm Bazarian International, confirmed that a deal was being worked out with the hotel group St. Regis.

"It's really a five-star luxury brand and we are very proud of that," he said. "We are in detailed negotiations with them."

He said that the design team of golfing legend Nick Faldo had discovered a way to "lengthen and further beautify" the St. George's golf course so that it might compete with some of the world's best, adding that any redesign would involve consultation between Government, St. George's residents and the Corporation of St. George's.

Club Med closed in 1988 and has since fallen into disrepair with squatters moving in earlier this year.

Dr. Brown said yesterday that eight to ten people were still living there but warned that they were risking their health due to the unsanitary conditions.

"Given the findings of health officials we must move quickly to ensure the people resident at Club Med don't become victims of infectious disease," he said. "The Ministry of Social Rehabilitation is already working with the small group to provide them with appropriate government assistance."

An Opposition spokesman said: "There is nothing new in today's announcement. It is electioneering – pure and simple. Look closely at the words used, there is nothing concrete, nothing the old town can bank on.

"We share the PLP's hopes for a new hotel on the hill, but do not believe they should continue making announcements about something that might happen. That's happened too many times in recent years.

"St. George's deserves concrete results, not more words."

The Ministry of Works and Engineering is due to begin abatement work in asbestos-contaminated buildings within the next three weeks. Dame Jennifer Smith, the former Premier and PLP candidate for St. George's North, said yesterday that it was the UBP which had neglected the site for 20 years.

"Residents will know that the Bermuda Progressive Labour Party Government and the Bazarian team is serious about bringing a new luxury hotel product to the East End by our action to begin demolition of asbestos-free areas of the facility."