A LUXURY £1.5 million penthouse flat overlooking the River Ouse is the centrepiece of a major bid for York's Bonding Warehouse.

Millionaire Peter Mandy, of Ascot Developments, which has already bought prominent areas by the Ouse, wants to convert the derelict Grade II riverside building into nine swanky apartments on the two upper floors.

The state-of-the-art penthouse will form part of the development.

City of York Council is currently assessing the merits of ten bids for the site, with the winner expected to be announced within the next few weeks.

While none of his rivals had disclosed how much they were offering for the building, Mr Mandy said he had offered "a little more than £1.1 million in cash". He also revealed that he was prepared to spend £3 million renovating the premises.

The Press reported last year how North Yorkshire entrepreneur David Hattersley, of the hospitality specialists Marmaduke Group, wanted to transform the dilapidated building into York's first five-star hotel, creating 200 jobs.

Mr Hattersley, who recently bought the 700-year-old Lendal Tower and is converting it into an exclusive place to stay, believes he could turn the Bonding Warehouse from a decaying eyesore into a real money-spinner for York.

Another local businessman, Marti Dix, also revealed plans to convert the landmark building into a major shopping and lifestyle destination to rival the likes of the successful Corn Exchange in Leeds.

Mr Mandy, who lives off Tadcaster Road, said he believed his bid just fell short of the offer from Mr Hattersley, but he remained ready to step in should the Marmaduke Group be unable to come up with the funding.

The entrepreneur recently paid nearly £1 million for Bishopthorpe Boatyard from York Mooring Services Ltd, which formerly included a restaurant which was called The Octogen and later The Birdcage.

He plans to resurrect and redevelop the eatery as a destination for river trips and is in negotiations with YorkBoat.

A City of York Council spokeswoman said: "The council received ten bids for the Bonding Warehouse. The property is now under offer, but we can't discuss any further details about the sale until contracts have been exchanged."

Millionaire makes his mark on York

MILLIONAIRE Peter Mandy started his working life as a slater and tiler for York firm Joseph Hardgrave.

He grew up in Westfield Place, Foxwood, York, only a few doors away from the late founder of Hogg The Builder, Michael Hogg.

Mr Mandy later started his own tiling business before building up a property portfolio and moving to Canada for 21 years.

He moved back to York and established Ascot Developments nearly six years ago. Among other things, the company is currently developing the former Carpet Warehouse in Front Street, Acomb, into ten apartments.