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A group of mystery entrepreneurs plan to convert one of the Island's oldest hotels into an upmarket residential apartment block catering to visiting businessmen and wealthy residents.

The Palm Reef Hotel on Harbour Road, Paget, was controversially forced to shut down last November after its owners were ordered to install a new $1 million sprinkler system to meet new safety standards. Hotel owners also claimed the facility was only staying open purely to keep its staff in employment.

But it has now emerged that another company plans to buy up the complex, demolish part of the 100-year-old structure and convert it into smart executive suites.

But mystery surrounds who exactly is behind the ambitious project. A company calling itself The Wharf Ltd., which has still to be registered but is believed to be made up of a group of local businessmen, has submitted a planning application and is thought to be in negotiation with the current owners over a final sale settlement.

The new design, also called The Wharf, will consist of up to 30 executive suites and 20 apartments, has now been forwarded to the Development Applications Board for principal approval, although the go-ahead from the board could be weeks away.

Ian Gordon, director of Entasis Architecture, the company overseeing the development on behalf of The Wharf Ltd., was unable to say how much the project would cost, although he was hopeful that, providing planning permission was granted, work would begin in the New Year.

"The Wharf is a proposed mixed use redevelopment of the site of the former Palm Reef Hotel. The development is planned to take advantage of a unique location on the waterfront adjacent to the Inner Harbour Ferry service and will be ideally located to provide a variety of accommodation for the business community.

"The executive suites, in addition to being a ferry-ride away from Hamilton, will also enjoy a delicatessen/cafe facility and small meeting room facilities. Every suite and the meeting rooms will have state of the art data communication facilities.

"The residential use is aimed at providing high quality accommodation in a convenient location to Hamilton. The residential units will enjoy the services of a concierge as well as many of the facilities provided by the executive suites facility, such as room service, house keeping and security. Every residential unit will be serviced with data points and high speed Internet access.

"The Wharf executive suites and apartments offer an opportunity to blend tourism and residential uses in a complementary fashion. The introduction of a spa and delicatessen will add further vitality to the development. The objective of the project is to provide a high quality development with complimentary uses which, it is hoped, will have a unique character, vitality and architecture which is sensitive to its unique harbour front location.'' But Mr. Gordon would not confirm who the developers behind the project are.

"The Wharf Ltd is a wholly-owned local company and the project is supported by local funds,'' was all he would say.

FACING OVERHAUL -- The Palm Reef Hotel BUSINESS BUC