A law paving the way for a new five-star hotel to be built on the former Club Med site was passed in a special session of the House of Assembly last night.

The Park Hyatt (St. George's) Resort Act 2008 will allow developer Carl Bazarian, of Bazarian International, to seek financing for a $294 luxury million hilltop resort for St. George's.

He has been given a maximum of five years to get the hotel up and running or lose his right to redevelop the land.

Premier and Tourism Minister Ewart Brown described the legislation as "historic" after it passed its third reading in the House.

Earlier, he told MPs: "I have said on many occasions, and have never heard anyone in Bermuda disagree, that the decaying site of the former Club Med hotel was symbolic of the rot that had come to infest our tourism.

"For so many years that building stood as a painful reminder of how we had, as a country, neglected our tourism product and took our competition for granted."

Dr. Brown said the "eyesore" of Club Med, which stood derelict for two decades, was no more after last month's implosion and that the passing of the new law was "a momentous occurrence for our legislature".

"There is nothing routine about this debate or this bill," he said. "We are participants in history today as we take a concrete step towards reversing the reputation of a hotel site in this country."

Opposition Leader Kim Swan said he and his party supported the bill and that a new resort would be great for the people of St. George's and a boost for tourism in the old town.

Mr. Swan said residents of St. George's had waited for years for something like this. "Many waited and almost died on the vine waiting for something to happen," he said. "I rejoice with Mr. Bazarian and it was a well delivered speech by the Premier."Last night's debate was largely a tame one with both sides of the House agreeing that the redevelopment of the Club Med site could only be a positive thing.

But tempers flared briefly when Deputy Opposition Leader Cole Simons questioned whether permission had been sought to use the Park Hyatt name on the bill, a query Dr. Brown said was "highly insulting and offensive".

Concern was also raised by several Opposition MPs about the 262-year lease being given to Bazarian for the part of the site on which condominiums will be built.

"That means that some 13 generations will have come and gone by the time that this property comes back to the people of St. George's, the people of Bermuda," said former UBPLeader Grant Gibbons. "Since this is public property I think 131 years would more than sufficient."

Former UBP Minister Quinton Edness also criticised the length of the lease in an interview with The Royal Gazette. The elder statesman said the land should belong to Bermuda and not be leased out for such a long period of time, contrasting it with the 99-year lease for the former military baselands.

Cabinet Secretary Marc Telemaque told this newspaper the lease needed to be long enough to persuade consumers to take part in ownership opportunities in the project.

Mr. Telemaque said some rivals were able to lease land for 999 years and Bermuda had fought to bring this lease down to 262.

Mr. Edness said: "It seems to be far too excessive. We might as well just give it to them. I simply urge the Government to be a little bit more diligent in respect of the land. This is for the people of Bermuda. One hundred and twenty years is way enough for a piece of property that's going to house a hotel."

Providing the rationale for the length of the lease, Mr. Telemaque said:"The length of the lease is directly related to the ability of the developer and ultimately the hotel manager to market the product. They are competing locally with other sites who are able to offer 999-year leases.

"The developer's first request was for 999 and thereafter 599 and after strong negotiation 262 years for the condominium component only was agreed. In order to persuade consumers to part with the significant sums that will be required to participate in the ownership opportunities at the intended resort, a lease of some length is required.

"On the flip side, the length of the lease is a positive as it guarantees the tourism use/character of the site for that period."

Back at the House some members worried that heavy tractor trailers needed to transport materials to and from the site could damage areas of historical importance.

The Park Hyatt hotel will have 100 dedicated hotel rooms plus about 80 additional rooms that condominium owners will release into the hotel inventory for visitors looking to rent. There will also be about 30 fractional units.

St. George's Golf Course will be redesigned and improved as part of the development, after which the public will still be able to play there for reduced fees. St. Catherine's Beach will also remain open to the public.