AN UPMARKET hotel is set to be created out of council offices in an historic York crescent, providing new jobs and boosting the city’s tourism industry.

Developers Rushbond plc have applied to City of York Council for permission to convert 1-9 St Leonard’s Place and 2 and 4 Museum Street into a hotel, along with restaurants and bars and also to carry out internal and external alterations.

A spokesman said it was talking to a number of hotel operators who were interested in the building, which has been owned by Rushbond since 2006 and will be vacated by local authority staff when the new council headquarters are completed.

Coun Sonja Crisp, the council’s cabinet member for leisure, culture and tourism, said the proposal was a “good news story” for the city at a time when such investment was more difficult to come by, and it would bring much needed new jobs.

“This is a wonderful opportunity to secure the future of a Grade II listed building in the heart of York,” she said, adding that she hoped the application would reflect the sensitive nature of St Leonard's Place.

Gillian Cruddas, chief executive of the tourism organisation Visit York, said the building could provide the opportunity for a “quality, charming hotel in the heart of the city”, close to so many of York’s cultural attractions.

“We welcome new investment in hotel facilities particularly where developments help us to promote the fact that our city offers something very special and different,” she said.

“We are keen for any new operator to work actively with us – and with the city’s existing high-quality hotels – so that the wider tourism sector can also benefit from this investment.”

But George Briffa, general manager of the Grange Hotel in Bootham, reiterated concerns raised earlier this year by the York Hoteliers' Association about the number of new hotels being created in York, which he said was adding to pressure on existing hotels and B&Bs.

“Nearly 1,000 extra bedrooms will become available through 2012,” he said.

Peter Brown, of the conservation watchdog York Civic Trust, said it would be working its way through the application documents, mindful of the building’s importance and the need for the development to show proper respect for the architecture.

A report to the council said the terrace, Grade II* listed and “architecturally stunning”, was built speculatively as a fashionable terrace promenade in 1831, forming the centre piece of a town improvement scheme and clearing an overcrowded part of the post medieval townscape.

“The interiors have survived well during their conversion to office use. The city council alterations have respected key internal features such as staircase and balustrades and also most of the surviving cast plaster features and cornice work.”