LEADING hotel operators want to open a luxury hotel on the former Terry's site in York.

Plans are being developed for an art gallery and museum elsewhere on the land, which would maintain links with the former chocolate factory's heritage.

York-based developer Grantside Ltd, which recently completed a £26 million deal to buy the 51-acre site, said today that operators with well- known national and international brands were interested in building a four- or five-star hotel at the former Terry's headquarters building in Bishopthorpe Road.

Managing director Steve Davis revealed he was now in close negotiations with two particular companies, whom he was unable to identify at this stage.

He said they were looking at building a hotel of between 150 and 200 bedrooms, with a new spa and leisure complex at the back.

The hotel would create at least 100 permanent jobs, and he expected to complete a deal with one operator within the next eight to ten weeks, subject to planning permission.

Meanwhile, Mr Davis has also revealed that he was now looking to create about 500 apartments elsewhere on the site, compared with an original figure of almost 600. About 100 of the apartments could be assisted-living accommodation for people aged over 60, and he was currently in talks with a company specialising in the area about this possibility.

The other key element of Grantside's plans for the Terry's site is 220,000 square feet of office buildings in a business park, which it is thought could create more than 2,000 jobs.

Mr Davis said that he had received approaches from both organisations wanting to move to York and companies that were already based in the city but interested in relocating to the site.

Asked when a planning application might be lodged with City of York Council and when construction work might start, he said Grantside had set a target for submission of a planning application of September this year.

Updated: 09:04 Monday, May 08, 2006