It's time Hamilton Mountain asserted itself economically from the rest of the city.

And businessman Peter Mercanti is doing his part to kick-start the area's renaissance.

Mr. Mercanti, chairman of Carmen's Banquet and Convention Centre, is proposing to construct an eight-storey, 53-room hotel on top of his current banquet centre located on Stone Church Road.

"It's about time for something like this in the area," said Mr. Mercanti. "The Mountain has to start stepping up its service. This will benefit all of the mountain. And it will mean a lot of activity for the area."

Mr. Mercanti said since the opening of the Red Hill Parkway, people have been asking where to stay on the Mountain while attending one of Carmen's wedding events. Since their business has expanded into the Niagara and Greater Toronto Areas, people need a place to stay while attending an event on the Mountain, said Mr. Mercanti.

"We have had a lot of calls from people asking if we could stay (at Carmen's)," he said.

Members of the public works committee this week agreed to a zoning application to allow the hotel construction. In addition, councillors also approved changing the development charges policy for hotels outside the downtown area to industrial, providing an extra incentive for developers to construct prestige hotels.

Politicians will vote on the committee's recommendation at their Oct. 15 council meeting.

City officials argued by changing the development charges policy for hotels, it will help make Mr. Mercanti's project "financially viable."

Mr. Mercanti expects the estimated $8 million hotel project to be completed in the spring of 2010.

City staff did not recommend adding more parking spaces to the facility. Carmen's can accommodate about 200 parking spaces.

Tim McCabe, general manager of planning and economic development said the 40,000 square foot facility is expected to generate about $1.5 million in revenue, plus additional economic spin-offs for the area.

"The additional jobs and taxes for the city, the hotel component is a natural fit for the area," said Mountain councillor Tom Jackson, who represents the ward where Carmen's is located.

"For them to make a legitimate go of this, we need to make it financially viable."

Although Mr. Mercanti described the proposed hotel as a "boutique" operation, he is actively pursuing the possibility the hotel could become a "flag operation" for a well known hotel chain.

"We are exploring that option," he said. "We are committed to the project and are pretty excited about the possibilities surrounding it. This is good news for the entire area despite the grim economic news."