The $23 million transformation of a failed housing complex in Warwick into a condo hotel was welcomed by a business owner yesterday.

Jay Correia, owner of the Swizzle South Shore right across South Shore Road from the Grand Atlantic development said: “It’s great for Bermuda, but especially for businesses in that area. We’d welcome the opportunity to have more visitors on our doorstep.”

Mr Correia said he was “cautiously optimistic” but said that several hotel developments slated for the area that had stalled in the past.

He said the conversion of Grand Atlantic to a condo hotel appeared to be “a good concept for Bermuda, with family accommodation”.

He was speaking after Lieutenant-Colonel David Burch, the public works minister, announced plans to repurpose the development into the Bermudiana Beach Resort, scheduled to open to guests in two years.

The resort team was led by Robert MacLellan of MacLellan & Associates, which launched the Bermudiana concept in 2014 but struggled to secure finance for the project.

Mr MacLellan added that the revival of the plan was delayed so Grand Atlantic could be used as accommodation for competitors in the 2017 America’s Cup which he said was “a worthwhile one-year delay”.

Colonel Burch said the conversion work would start in May and provide about 70 construction jobs. He added the resort would employ about 100 people when up and running.

The minister said the site would include resort amenities and a “Hill Hiker” lift to the beach below.

Colonel Burch said there had been “extensive negotiations over the past seven months” to modify the business plan with the Bermuda Housing Corporation which owns the property.

The minister said the new arrangement included “more cost-efficient project financing”, which would help the BHC to “clear the debt on the site” and focus on housing.

Colonel Burch added that the redevelopment would happen under a wholly-owned subsidiary of the BHC with co-developers architects OBMI Bermuda and Bermuda Realty Company Limited.

Hotel operations and commercial management will be provided by MacLellan & Associates, with 71 of the condos to be refurbished.

The remainder will be converted into a reception area, a bar and restaurant and an operations centre.

Mr MacLellan emphasised the high cost of building from scratch in Bermuda and said Grand Atlantic was “a very sound structure and well-built building”.

He added: “The biggest challenge in all islands is the low season. The high season looks after itself, but the off season is longer.”

Mr MacLellan admitted that “financing is a major challenge” but said that the cash available for the Bermudiana was “absolutely adequate to carry the project all the way through”.

The Grand Atlantic development was criticised by environmental groups and area residents over the stability of the cliff after it was built by a previous Progressive Labour Party administration.

But criticism of the site as prone to erosion was dismissed as motivated by politics.

Colonel Burch said: “Certainly, we have maintained all along that all the investigation and research into the cliff face supported our belief from the very beginning, that the construction and the site was sound.”

Grand Atlantic, billed as affordable housing, featured 78 condos for sale when it opened in 2011, but only two homes were sold.