Work on a multi-storey housing development on Union Street is set to begin this year as Government scrambles to deal with the imminent closure of the Canadian Hotel.

This week the Planning Department said it was pushing ahead with enforcement action after getting little response from owner Thomas Powell over demands for fire safety renovations at the 55-bed hotel for single men.

But Bermuda Housing Corporation general manager Raymonde Dill said finance had been found for a new multi-storey unit on a Bermuda Industrial Union (BIU) car park.

The project will be run by the Corporation on a long-term lease. It would cater mainly for single men although Mr. Dill said a two block connected design would give the potential for single women on one side, with between 50 and 75 rooms overall.

Mr. Dill said: “The finance is in place. We have approval from the ministry to borrow. The banks have extended a line of credit to do this.”

Last year BIU president Derrick Burgess called on the Island's banks to lend money interest free to get the project moving.

Asked if the banks had given Government a break Mr. Dill said: “The Bank of Butterfield, as always, has been very helpful in providing finance to the Housing Corporation.

“It has not in this instance done any more or any less than it has done for several years. We have a good line of credit with them and we get good commercial rates.” He added: “It should be three months before we can hit the gravel, we are hoping six months to build it. We should see something built before the end of the calendar year.”

And a 12-bed Bermuda Housing Corporation development, also on Union Street, is due to open this month for single men. Mr. Dill said there had been a hiccup with the electricity supply, delaying its opening.

Housing Minister Nelson Bascome told The Royal Gazette he was also pushing for a planned revamp of the Salvation Army hostel, first mooted in December 2000, to be speeded up.

Asked about the delay he said: “One reason we didn't pursue this as vigorously with the Salvation Army was that there was a change in leadership there. We are now back in negotiation about that property.”

He said one option was to expand the base into adjacent land at the Parson's road site on to Government and derelict land. This option would link it with newer parts of the shelter while older parts would be replaced. There are also other options for a site on the other side of the road.

Mr. Bascome said: “I have asked this project to be put on the fast track.”

Mr. Dill said Government was taking the lead in helping jump-start the project, even though it had not been heavily involved before.

He said architects had been charged with coming up with a design, to match the 50 or so rooms currently available, that was economic and quick to build.

Mr. Dill said he hoped work would start this year.

Asked about the fall-out from the closure of the Canadian Hotel Mr. Bascome said: “I have challenged the Housing Corporation to come up with a solution to deal with this.

“We had hoped someone in the private sector would take up the challenge to provide help for these individuals but it has been left to Government.”

He said Mr. Powell had, at one stage, talked about building another development for single men.

“I am not going to think about waiting for the private sector to get this started, we have to do it. You bite the bullet, you have to do it.”

He said Government had not given up on working with Mr. Powell.

Last week Mr. Powell said he didn't want to put in money for renovations but Mr. Bascome said that he must be taking more than $400,000 in rent based on 55 people paying $140 rent over the course of a year.

“We are willing to work with Mr. Powell and the Planning Department, whatever we can do to assist. I have not abrogated my responsibility,” said Mr. Bascome.

However the Planning Department has said enforcement was still on the cards.

Building Control Officer Nicky Gurrett said Mr. Powell had acknowledged the department's letter but given no promises he would take any action.

She said: “It's been three years, we keep writing letters. It's not something we suddenly demanded. It's his choice."