Plans to convert the HM Revenue and Customs building opposite York Place tram stop, Edinburgh into a 130-key boutique hotel have been revealed.
A pre-application notice for the development has already been submitted to Edinburgh council, according to a report in Edinburgh Evening News.
Developer Consensus Capital Property said works would take around 14 months with the property likely to open in 2015.
Negotiations are underway with potential operators, with a four-star hotel operator and a hotel apartment operator going head-to-head, according to the report.
The plan is said to be the latest in a string of proposed developments along the £776 million tram line.
Conservative transport spokeswoman Councillor Joanna Mowat was quoted saying the plans were a vindication that trams were “driving development”.
“This is an indication of the ‘tram effect’. That was what was planned – we would see development along the length of the tram route,” she added.