The vision of a new business hotel at the heart of the city centre moved a step closer yesterday when project developers signed contracts with Corporation of Hamilton chiefs.

The Memorandum of Understanding, in which developers TG International Investments Ltd. have agreed to stump up $60 million to build the top of the range facility on the site of the current Par-la-Ville car park, means that construction work could start in the next six months and be completed by the year 2000.

Although the signing does not guarantee that the project will definitely go ahead, it does lay out certain ground rules for the two parties to negotiate a binding contract.

Corporation of Hamilton secretary Roger Sherratt said: "This is a preliminary agreement saying that the two parties are going to work together to bring this to a successful conclusion.

"For example there are a numbers of obligations that we have to guarantee such as proof that we have the right to lease the property.

"There's also a requirement on behalf of the developers that they will get the necessary planning permission.

"It also states the conditions in which they could withdraw, for example if they couldn't get DAB approval.'' The planned hotel will consist of 140 suites with an additional 20 condominiums and will cater primarily to the international business community.

At yesterday's signing ceremony, Hamilton Mayor William de V Frith said: "The Corporation firmly believes that this hotel will be a major boost to Hamilton and will dovetail neatly into the new City of Hamilton plan.

"The area around the site will be aesthetically improved and we will also be looking to make aesthetic improvements to Par-la-Ville Park without the hotel encroaching into the park.

"Although the final design of the hotel is not yet completed we are satisfied that the developers are working closely with the planning department to design a building that will be a credit both to the city and Bermuda.'' The hotel is the first project in which the Corporation has secured finance from the private sector. While TG International will provide all the funding for the building of the hotel and take all the running profits, they will pay rent to the Corporation for the site.

And the Corporation will still be able to collect funds from the site car park, which will be rebuilt underground.