million hotel and home development has been given the go ahead.

The Palmetto Gardens project -- said to be the first new hotel in Bermuda in 20 years -- will see a 28-room hotel, restaurant, health club and spa, townhouses and villas take shape within two years.

The "hotel for the Millennium'' could provide a centrepiece for the planned revitalisation of the village.

Flatts is destined for far reaching changes, with traffic calming, a possible new bridge and street decorations among the possible improvements.

After November, the existing Palmetto Hotel will be demolished to make way for a new resort which will cater to the new type of tourist for the new Millennium.

The 22 staff have been offered redundancy or the opportunity to have their position back once the development is complete.

Owner Jeff Amaral said the plans, which have been ongoing for two years, would enable the new facility to provide a wide variety of uses.

"The advantage of what we are building is that we can cater to any market,'' he said.

"If tourism does fall off, we will still have the business traveller.'' The hotel will feature state-of-the-art communications facilities, designed to make life easier for executives. And it will be a low maintenance building.

"The current building is quite old and it creates a maintenance headache. If we try to modify this, we don't know what we will find,'' he said.

The townhouses are expected to fetch around $800,000 and the waterfront villas will be on the market in excess of $2 million.

Offered on a leasehold basis, Mr. Amaral is hoping that pre-construction sales will be strong.

In addition, there is likely to be a lease back option so some of the homes could be utilised as hotel accommodation.

Planning permission has been granted and work is due to start following the end of the summer season.

Once underway, it will take between 12 and 18 months for the work to be completed.

PLANNING PLN