They won't get fooled again: rock venue turned into Cornish flats

In its glory days, the Cornwall Coliseum boasted the Womad world music festival and concerts by Elton John, Peter Gabriel, The Who, REM and more recently Fun Lovin' Criminals. But the dilapidated venue on the seafront at Carlyon Bay, near St Austell, is to be demolished to make way for a new £100m apartment scheme.

The redevelopment is the most significant private investment ever in Cornwall. The Ampersand Group, which recently purchased the site, estimates it will create up to 600 local jobs and inject £30-£40m a year into the local economy.

Johnny Sandelson, chief executive of Ampersand, said: "We are embarking on what is one of the most significant post-war coastal redevelopment initiatives in Britain. Cornwall is already on the way to becoming a tourist destination to rival any in Europe and, I believe, is now riper than ever for this level of investment.

"The Restormel area, as with much of the south coast of Cornwall, is crying out for quality accommodation to meet its ever-growing tourist market."

A London property developer, Mr Sandelson is a regular visitor to Cornwall. He was made aware of the potential of the site by award-winning architects David Shalev and Eldred Evans, designers of the Tate West in St Ives, who were helping to build his new house in neighbouring Fowey.

Mr Sandelson, 34, says that he raised the capital from "traditional sources" – three City banks.

"It has been hard in the past to persuade City banks and pension funds to invest west of Exeter. But I think with the success of the Eden Project in St Austell, Rick Stein [the TV chef and restaurateur in Cornwall] and Falmouth's new National Maritime Museum, that is beginning to change."

The site will comprise at least 500 apartments, most with ocean views across Carlyon Bay. They will be sold on a buy-to-let basis.

Two luxury hotels are also proposed. Mr Sandelson says: "The concept comes from European spa towns. We intend to build a world-class centre for visitors." Ampersand's plans include cultural and educational facilities, as well as health and leisure outlets, to create a seaside community that attracts visitors all year round.

The site was originally granted planning permission in 1989, but despite a string of different owners it has yet to be developed. The current buildings have become run down and the previous owners had problems getting licences to run club nights.

Working within the existing planning permission, construction of the site is due to start during April 2003, with an estimated completion towards the end of 2005.