Front Street will be transformed into a giant, open-air art gallery this Sunday when the work of hundreds of artists will be displayed on the waterside.

The first annual Grand Art Festival By The Sea, sponsored by the Bank of Butterfield in conjunction with Masterworks, will see artworks displayed from the flagpole as far as Parliament Street.

Restaurants and street kiosks will be open and, to brighten up the proceedings even more, the Corporation of Hamilton has given permission for youngsters to try their luck with "chalk pavement painting''.

Tracy Outerbridge, events coordinator, says that the Bank of Butterfield had been looking for some time for "something new'' to sponsor.

"We had done a lot with sports, so we decided to branch out with the concerts. But we wanted to reach out to everybody in the community, and we felt that the visual arts would be a good, innovative thing for us to support.

The most important aspect for us,'' she adds, "is the fact that we have donated $5,000 as a basis for an arts scholarship in Bermuda.

"We hope that as many artists as possible will come along and sell their work, or to paint al fresco -- to the strains of a steel band. It's all very casual,'' says Masterworks' Elise Outerbridge.

"What we're hoping, is that people who wouldn't be inclined go into an art gallery, will come to this! We like the idea of people creating art, looking at art, and making up their own minds as to what they like, or don't like -- not being told what to like.'' The novel idea is based partly on the `Fresh Paint' contest staged annually in Boston and the `Quick Art' competition of Madrid.

"It all began about 18 months ago when we were approached by Andrew Burnett-Herkes and Steven Marklew from the Bank of Butterfield. I think they recognised that it's our aim to bring art into the community and they were interested in that aspect as it was a kind of extension of their very successful Concerts in the Park series.

"We said we wanted the event to be more than just a competition and that it might be a good way of raising money for a visual arts scholarship -- as I believe there is only one on the Island!'' Thanks to this financial assistance, a scholarship fund has now been established.

"They have helped with advertising costs and marketing and put up the seed money and worked very hard to make this scholarship a reality,'' says Mrs.

Outerbridge. "Every entry in the competition has to pay a $5 entry fee which goes directly to the fund, so with over 250 entries already, we have made a good start.'' Tracy Outerbridge also feels that this type of festival should encourage people who like to draw or paint but feel intimidated about showing their work.

"We have people who've entered this competition whose work has never been seen before. For example, there is one guy who put in three pieces of work who has never been involved in any way in the art scene, and when we looked at his stuff, we thought it was really exciting -- so it's also a very nice way of discovering new talent!'' The build-up to the Festival began months ago, when Masterworks began holding community art days in St. George's, Somerset and at Astwood Park. "This was an off-shoot of our `Artist Encounters' where people come and grab a paintbrush and get painting,'' she adds.

"One thing that became obvious is that there's a lot of latent talent out there.'' Pointing out that the Masterworks Foundation had no corporate sponsors and no government hand-outs, director Tom Butterfield says they have held receptions to introduce Bermuda's corporate population to some of their programmes.

"We tried to get them to join as members and it also allowed us to get over to them the perception that we are not just a static collection, hanging in a gallery! So for the past three years we've held these receptions and, to a large extent, the idea of a Festival grew out of that.'' Judges for the competition include critic Gareth Finighan, artist Robert Bassett, former art teacher Janet Nearon, who is now a bank executive, art dealer and consultant Julie Sylvester and interior decorator Patti Crouch: "Quite a wide-ranging panel,'' notes Mrs. Outerbridge.

Categories include Under 8, 12, 16 and 21, adults, senior and professional.

"Then there will be a `People's Choice' award from attendees for their personal overall favourite, to be announced at the end of the day.'' The Grand Art Festival By The Sea takes place on Sunday, May 31, with Premier Pamela Gordon officially opening the event at 12 noon. For further details and information, telephone 295-2379.