waterfront broke ground on the first phase of the ambitious development yesterday.

The joint venture between Pearman Watlington & Co. subsidiary Waterloo Properties, Princess Hotels and Centre Reinsurance Holdings Ltd., covers 4.08 acres and is said to be the largest development in Bermuda since the construction of the Southampton Princess in the early 1970s.

"It is very encouraging to see the local hotel and retail industries and the international insurance business joining hands to make this project a reality,'' PW's chief executive officer Will Cox said at the ground-breaking yesterday, where political and business leaders got the project started.

The first phase will see two office buildings constructed over a period of two-and-a-half years. The first building, to be called the Zurich Centre, will house Zurich Insurance subsidiary Centre Re's world headquarters on 120,000 square feet of office space spread over six floors. Centre Re will take a 22-year lease on the building.

Centre Re president David Brown said the company was looking forward to consolidating into one "prestigious new Bermudian location''.

Plans for the Zurich Centre include a central plaza with a "Poultry Cross'', an open square at its centre, and two levels of retail space.

Retail and office lobbies will be separate.

Once the first stage of construction is completed, PW's affiliate Miles Market will relocate to a new 60,000 square foot building to be constructed alongside the Zurich Centre. This building will also house PW's Marine Chandlery and other offices.

Plans also call for 200 underground parking spaces.

Miles and PW's will continue to operate without business disruption.

The scheme includes land from Waterloo House in the east to the present location of the staff quarters of the Princess Hotel in the west.

Princess Hotels regional vice president Stephen Barker said: "We believe this project will revitalise the waterfront area, enabling us to provide a better vacation experience to our visitors.'' Later stages of the development will add residential units along the waterfront.

The partnership has entered into an agreement with Beacon Development Services of Boston for the management of the project.

US firm Childs Bertman & Tseckares is the project architect. Local architect for the project is Conyers & Associates. The main contractor is understood to be D&J Construction.

NEW DEVELOPMENT -- An artist' s impression of the new Waterfront at Pitts Bay with the Zurich Centre building on the left and the proposed Miles Market building on the right.

SITE PLAN of the new Pitts Bay development.

TOURISM TOU