The new owner of the Belmont will dramatically scale back the hotel he plans to build but treble the size of Newstead if he buys the property, The Royal Gazette can reveal.

Belmont Hills Development Limited was given Environment Department approval last September to knock down the Belmont and build a 120 room hotel and 73 residential units.

Belmont Hills owner Kevin Petty is also in talks to buy the Newstead Hotel, which has been rumoured to have been losing money for years.

Mr. Petty told The Royal Gazette yesterday if the deal goes through, he will build a 50 room hotel at Belmont and expand the Newstead from 40 rooms to 140.

His company has still to complete the purchase of Newstead, and Mr. Petty said he did not yet know if the Paget property would need to be closed during the expansion.

Mr. Petty said he had approval in principle from Government for his change of plans.

The revamped Belmont will also include 40 condominiums and 30 two- and three-bedroom cottages.

He said he hoped to start work on the new Belmont Hotel within the next six weeks and have it completed within 16 months.

"One of the things the Government made sure was that we still build (the rooms). They are concerned not with the size, but the room count had to be equivalent of what we were building before," he said.

"One hundred and forty rooms and 50 rooms is not that dramatically different from what we wanted to do before, and in fact it is in excess of that.

"No one in their right mind would open a hotel with the tourist trade the way it is. We have to have the residential portion to finance that and the two elements have to go hand in hand." Mr. Petty said he could not go into details about what he planned to do at Newstead because he hadn't been able to send in engineers or architects as he did not own the property yet.

"We are going to do some major renovations and keep a lot of the stuff that is there," he added.

Mr. Petty, who also owns Somers Realty and Somers Management, confirmed in April that his company was in talks with Newstead owners Tony and Dana Goodfellow to buy the Harbour Road property.

He said yesterday he hoped to complete the purchase of Newstead by the end of this month.