By Paul Unger, Business Editor, Daily Post

ONE of the world's leading hotel groups has signed a deal which could kick-start a huge development on the Mersey waterfront. Radisson SAS has reached agreement with local developer The Beetham Organisation over proposals for the former St Paul's Eye Hospital site in Old Hall Street. Under the deal, Radisson will undertake a 20-year management contract on a 200-bed conference hotel, incorporating a 10,000 sq ft Holmes Place fitness club, to be developed by Beetham.

The scheme also includes a 110-metre high apartment block which would tower over the city's business district and be visible from as far away as the North Wales coast. The developer still has to confirm financial backing for the £50m project, but said that advanced discussions were under way with two rival banks. Beetham chairman, Hugh Frost, said of the tower: "In terms of the impact it will have on the waterfront, it is probably the most significant new building in Liverpool since the Royal Liver Building." He added: "We have been trying to get this project moving for two years and it is frustrating that it has taken so long."

The company originally applied for Objective 1 aid but this was turned down by the North West Development Agency because other hotels which received multi-million pound grants in recent years have been so successful. A further delay was caused because Radisson was initially unwilling to sign up for more than 140 rooms in Liverpool. The hotel group has since changed its mind, and the deal with Beetham has now been signed at its Brussels head office. The developer has now served notice on car park operator NCP to quit the 1.5-acre site.

The apartment tower will have 110 flats with an average price of almost £200,000. The penthouse, with commanding views over Wirral and the mouth of the Mersey, will be Liverpool's first-ever £1m apartment. Although still ambitious, the new proposal is slightly more modest than the original plan for two huge towers crammed into the same triangular site. The developer will shortly apply for detailed planning consent for the revised scheme, which also includes a 142,000 sq ft office block, provisionally called 101, Old Hall Street. The target rental will be £16 per sq ft, which would set a new record for Liverpool city centre.