A TOP-class hotel group has snapped up an historic building in York to create a 42-bedroom four-star-plus hotel which could generate up to 70 local jobs.

Even without planning consent, the Hotel du Vin group has paid an undisclosed seven-figure sum for the controversial former Georgian headquarters of Shepherd Homes, on the corner of The Mount and Scarcroft Road.

But given the eventual go-ahead for revamping the entire inside of the two- storey Grade II listed office, and creating a baroque-style courtyard complex alongside it, the hotel could be ready for occupation by late summer or early autumn next year. The entire project will cost up to £9 million.

Originally built as a private residence in the Georgian era, the house was extended several times until Shepherd Homes acquired it in 1976 as its head office. The company moved to purpose-built offices in Jockey Lane, Huntington, in 2003.

Shepherd's plans to build a four-storey apartment block on the site at the junction of The Mount and Scarcroft Road were rejected after an outcry by residents complaining that its height would overshadow the listed building.

A revised scheme to build five three-storey houses there was given the green light by planners.

Instead, Shepherd has agreed to the Hotel du Vin sale, the proceeds of which will be used to help fund its joint plans with Wimpey to build 360 homes on the York College site in Tadcaster Road, York, when the land becomes available next year.

The Hotel du Vin group has made a success of concentrating its hotels in university and cathedral towns in the south, including Henley, Brighton, Cambridge, Tunbridge Wells, Bristol and Birmingham.

It recently opened a hotel in Prospect Place, Harrogate, at the start of a push into the north. Average nightly rates are £130 per room.

Robert Cook, the group's chief executive, said: "We had meetings with York planners prior to the sale and we had very positive feedback. Our view in life is that when we buy a building, it is what we don't do to it, rather than what we do.

"That splendid Georgian building will remain intact as the cornerstone of the new hotel which will be at the higher end of a four-star rating."

Extra bedrooms forming the courtyard would be built alongside the listed building which will feature a bar and bistro drawing on a list of 500 wines, a private dining area and a billiard room.

A spokesman for Shepherd Homes said: "Although we secured planning consent for the redevelopment of the site for residential use, we faced considerable local opposition.

"Major changes were made to meet the concerns expressed and those changes adversely affected the economics of the site for residential development."

Proceeds from the sale would help to fund the York Technical College project next year, he said.

Updated: 10:10 Thursday, February 16, 2006