the last remaining parcel of land in Bermuda zoned for major hotel development.

The Willowbank Foundation, which owns and operates the Willowbank hotel in Sandys, plans to build a hotel operation at Southlands, a 361 -acre estate on the South Shore Road in Warwick.

Project approval would also activate a second Willowbank plan to build 40 units to house the elderly on the north slopes of the South Shore estate.

The property lies on either side of South Shore Road, just west of the site of the proposed Ritz-Carlton Hotel, and acts as a green buffer between Dunscombe Road in the east and Rocklands Estate in the west.

An explanatory letter submitted to the Planning Department says that proceeds of the hotel operation would be used to subsidise housing for the elderly.

"It is our client's (Willowbank) intention that the proceeds of the tourist units will go toward housing for the elderly,'' the letter said. The intention, it added, was to create "affordable accommodations'' for seniors.

In 1989, the Foundation won approval to build housing for the elderly on four acres of Southlands' north slope. An unusual condition of that approval saw the Foundation agree to surrender existing development rights on some of the most environmentally sensitive parts of the property such as woodlands and arable land.

Plans show the foundation would build 27 self-catering tourist units and a restaurant above the six beach-side acres of the property. The remaining development, including a main reception building, would be built at a later stage on 273 acres.

"We believe the cottage colony-style, self-catering tourist units represent a unique opportunity to create affordable, high-quality family tourist accommodation with the flexibility built in to accommodate a couple or up to a family of six,'' architects Barker & Linberg said.

"The site, with its substantial beach front and acres of beautiful grounds, will provide visitors with an outstanding resort experience, and enhance Bermuda as a first class holiday destination offering value for money.'' It is understood there are no plans to proceed with building before 1995 and that the project would be phased over succeeding years.

Willowbank chairman Mr. Fernance Perry was off the Island yesterday and unavailable for comment. Foundation deputy chairman Mr. Peter Jones declined comment.

It is not clear whether the tourist development would be built before the housing for the elderly. Mr. Jones declined to say whether the estate's main home had been incorporated into the hotel plans.

It also could not be learned how the projects would be financed. However, one person involved questioned the Trust's financial wherewithal saying: "We don't have the resources for this.'' The Willowbank hotel in Sandys is one of the Island's more successful small properties with a year-round occupancy rate of about 65 percent.

General manager Mr. Jack Harris said the 62-room, Christian operation, which occupies six acres near Elys Harbour, gets 90 percent of its business through word-of-mouth and returning customers.

It is believed money for the Southlands project would in part draw from revenues created by Willowbanks' Sandys operation.