NEWPORT — The Procaccianti Group, owner of The Westin Providence hotel, announced yesterday that it will buy Newport Grand for $155 million as the cornerstone of a future development that would expand well beyond the gambling facility’s 24-acre site.

John Longo, of The Procaccianti Group, displays artists’ renderings of a proposed $1.4-billion project in Newport that would include a hotel, luxury residences, stores, restaurants and venues for entertainment and recreation.

The Providence Journal / Bob Thayer

The proposed development would encompass 60 acres, cost $1.4 billion and possibly feature a Ritz-Carlton hotel, luxury residences, stores, restaurants and venues for entertainment and recreation. The urban-style center would be dubbed “O■ Newport,” and might serve as a model for more O■ developments Procaccianti would like to build around the country, Tom Niles, executive vice president, said at a news conference yesterday.

While Cranston-based Procaccianti has a purchase-and-sale agreement with the owners of Newport Grand, the rest of the plan is highly speculative. It involves government and private property that local officials have long identified for redevelopment if they were to be sold.

“We are taking liberties to consider the possibilities,” Niles acknowledged.

Anchoring O■ would be a vastly expanded array of video slots — 2,101 machines already approved by the state — at a gambling hall that would no longer be named Newport Grand, or known as jai alai, as many Rhode Islanders affectionately call the now-vacant fronton.

“The VLTs [video lottery terminals] will be just one component, but it will be an important component,” Niles said.

When asked whether Procaccianti envisioned a full-scale casino at the site, Ralph Izzi, marketing communications director, replied that the company will “stick with whatever the rules and regulations are in Rhode Island.”

Procaccianti announced its plans at the Hyatt Regency, in Newport, before an audience of about 50 people. Most appeared to be affiliated with Newport Grand, Procaccianti or the media, except for a few business leaders and citizens. Noticeably absent were city officials, even though Procaccianti’s vision for the area was torn right from the pages of the city’s draft master plan for the North End. Niles said O was based on the “phenomenally, well-crafted document.” It calls for transforming the North End into a commercial and residential hub that would serve as a gateway to the city and attract visitors from near and far.

The City Council, however, has not yet endorsed the master plan and yesterday’s announcement caught many local officials by surprise.

“I didn’t know about it frankly,” said City Manager Edward F. Lavallee, who didn’t attend the announcement.

Paige Bronk, director of planning and development, said Niles called him informally on Monday. But beyond the purchase, he said, “I’m not sure what’s going on.”

As in the master plan, Procaccianti’s development assumes that vast tracts of land will be freed up for development when the state begins the long-anticipated realignment of the Pell Bridge access roads and ramps. The state has not yet settled on a design, but city officials urge the abandonment of the “road to nowhere,” a highway that was supposed to cross Aquidneck Island but instead runs along the western side of Newport Grand and then dead ends abruptly, just across the street from the gambling center.

These 32 acres would allow Procaccianti to create a development that Niles said was inspired by New Urbanism, a movement away from suburban sprawl and toward pedestrian-friendly urban centers. It would feature buildings of varying heights, sizes and architectural styles occupied by stores, service shops and apartments. There could be a spa and wellness center, a complex for recreational sports programs and a hotel with an indoor water park.

“It will be timeless and unique,” Niles said. In describing the O concept, he said, “It’s about the social fabric, about community…It’s about light and sound, air and water.”

Procaccianti is also eyeing the former Naval Hospital, which is less than a mile away on seven desirable acres on Narragansett Bay, just north of the Pell Bridge. The Navy has announced its interest in selling the property. Procaccianti envisions a covered, outdoor entertainment venue and a marina there.

Both the hospital site and the land around Newport Grand would be served by an intermodal transportation system, including water shuttles and trains.

Niles was asked what would become of the development if Procaccianti could not succeed in acquiring the parcels surrounding Newport Grand.

“It does change the disposition,” he said. The Newport Grand site itself “does not yield the critical mass” for the project.

If successful, it would take about 10 years to complete, he said.

U.S. Rep. Patrick Kennedy gushed over the project, telling the audience that “if this wasn’t such a serious proposal, I think you would call the development Fantasy Island.” Keith Stokes, executive director of the Newport County Chamber of Commerce, hailed the proposal as “one of the most extraordinary commercial economic development projects I’ve seen in the state.”

City Councilman Justin S. McLaughlin, the sole Newport official present, said that individual parts of the plan might be supported or rejected by the community. But, he said, “A key thing to me is that someone with money says they are willing to invest in this [master plan] vision.”

Bronk said it wasn’t surprising that a developer would jump at tapping the area’s commercial potential. But, he said, “What does surprise me is that the developer is saying they are going to build on land they don’t currently own.”

Bronk noted that the city and Newport Grand are in a legal dispute over the denial of a building permit for an addition to the gambling complex. Newport Grand sued and a Superior Court judge sided with the company ordering the city to issue the permit. The city appealed.

The expansion is related to a contract that Newport Grand signed with the state in 2005. It freezes the tax rate on video-slot revenues for 10 years and permits the addition of 800 slots, for a total of 2,101. The agreement requires Newport Grand to make $20 million in improvements, including construction of a hotel and a 23,000-square-foot addition. Newport Grand missed a deadline last month to complete the addition. The company blamed the delay on the city’s actions.

Yesterday, Procaccianti officials said they would strive to honor the contract. Some of the improvements will be completed in a little over a year. The company is moving ahead with a plan to create new space out of the fronton. The timeline for construction of a hotel might be modified, Niles said, because of the plans for a five-star hotel.

The sale of the property is contingent upon the transfer of the gambling license and is expected to be completed in a few months, Izzi said.

Diane S. Hurley, CEO and co-owner of Newport Grand, said that with so many opportunities unfolding in the North End, it became apparent there was a “need to seek out a company with investment resources…to make this vision a reality.” She said it was “by no means an easy decision, but was made easier” because Procaccianti is a Rhode Island company with an “entrepreneurial spirit.”

She got choked up describing how she stood at the side of her father on the day in 1976 that the fronton he built opened.

“My family is very proud of Newport Grand’s evolution over the past 30 years,” she said. “I stand here today with so many emotions.”

rsalit@projo.com