Developers plan to spend $2 million renovating the Lines Brothers following their purchase of the Reid Street landmark this week.

No price was given for the sale but purchasers Management Resources (Bermuda) Ltd. said the renovations will include gutting of the interior and the addition of a penthouse.

Mr. Alan Forrest of developer and part owner, Management Resources (Bermuda) Ltd., said, "We are keeping the main envelope of the building but we are completely gutting it.'' Management Resources is the same local firm that is developing the Glencoe townhouses in Salt Kettle, Paget. They are about two-thirds through that project.

Planning permission is being sought for the varied improvements. Right now the building, which has lain dormant for some five years, has five storeys. The current plan is to increase that to seven floors.

Mr. Forrest said: "We are building one penthouse above the current structure and we are converting what is a very high ground floor into two floors.'' The building is to be renamed The Exchange Building and the owners are hoping to have it open for business between January and March of next year.

One of the tenants will be the Chancery Wine Bar, currently at Chancery Lane.

For the restaurant, which will occupy the lower level and mezzanine of the two-level basement, it will mean the possibility of doubling the seating capacity.

But with the installation of a "dumb waiter'' elevator, the restaurant will be able to deliver directly to its fellow tenants.

All but one floor has already been taken up. There will be 19,000 square feet of usable space.

Mr. Forrest said: "Most of it has been spoken for, but we do have one floor vacant at the moment comprising 3,000 square feet. We don't envisage a problem finding a tenant. Eighty percent of the tenants will be local businesses.

"Most of the tenants have an ownership stake in the building. They are mainly local companies. One of the non-owning tenants is an international company that will have one of the upper floors.

"There will be semi-retail from the ground floor, and four floors of first class office space.'' Depending on planning approval, the company was hoping to begin the required work toward the end of August, with about six months of work on the basic structure.

Mr. Forrest said: "It's mainly new air conditioners, new windows, new floors.

We will get rid of all of the old wooden stuff, which is partially rotten.

Most of the wooden parts are of no use. The building is probably around 50 years old, or possibly older.

"Obviously, we are adding a penthouse. We have to put in a brand new passenger elevator, because there was none. But we will keep the traditional facade.''