NEW YORK, Aug 10, 2001/ FW/ --- Versace's posh palatial pad, the infamous site of his brutal 1997 murder, is being eyeballed by Chris Blackwell's Island Outpost, which already owns and operates five hotels in Miami's trendy South Beach.

South Beach real estate sources say Blackwell is considering operating the renowned fashion designer's home as an exclusive B&B resort, keeping Versace's original design scheme, and restoring and duplicating his original furniture, accessories and artwork for a museum-like ambiance.

"We have had some interesting discussions with the owners and we know they're considering their options," Brad Packer, head of PR for Island Outpost, says. "This could make for an exciting and unique opportunity for South Beach."

Versace bought the historic but dilapidated apartment building called Casa Casuarina in the early '90s, spending millions to transform it into the decadent digs where he and famous friends could party in private. There are 15 bedrooms and several marble baths surrounding a massive inner courtyard with palm trees, fountains and statues. The master bedroom is 1,400 square feet. Sister Donatella's mistress boudoir is a slightly smaller 1,000 square feet. Versace also purchased the hotel next door and razed it to accommodate a Venetian fantasy pool, complete with rows of suitable-for-viewing open showers.

Curious tourists still flock to the stained sidewalk in front of the mansion where Versace was shot pointblank in the head by Andrew Cunanan.

Almost two years after his death, the Versace estate was sold to BTI Telecom CEO Peter Loftin for around $20 million. His representatives have approached several top international hotel chains with the B&B concept over the past few months.

If Blackwell does take on the Versace task, it will not be his first cultural landmark. He owns Goldeneye, a cluster of villas in Oracabessa, St. Mary that includes British scribe Ian Fleming's home where he wrote his famous James Bond novels. Blackwell also oversees Noel Coward's Jamaican estate, Firefly, now a museum; and he owns Compass Point in Nassau, a resort across the road from the famous recording studio for music legends the Rolling Stones, Lenny Kravitz, Roxy Music, Robert Palmer and Bob Marley.

Blackwell is a South Beach pioneer whose vision revitalized the neglected area in the '90s, turning it into today's fashionable tourist destination with modeling agencies, swanky hotels and shops, hip restaurants and sexy nightclubs.

The respected music impresario (founder of Island Records) bought and renovated the Marlin Hotel in 1991, in the then seedy area populated by Haitian refugees, Marielitos, drug addicts and retirees in flea-bitten old age homes. Blackwell slowly purchased and renovated four more; the Cavalier, Casa Grande, The Kent and The Tides, creating a village of hotels located within blocks of each other.

Blackwell's other properties include Pink Sands in Harbour Island, The Bahamas and several in Jamaica: Strawberry Hill (elegant cottages and spa in the Blue Mountains), The Caves (a group of cottages in the Negril cliffs), Jake's (a cluster of funky cottages on Treasure Beach) and Bolt House in Galina, St. Mary.