Westerly - The management of the Ocean House luxury resort in Watch Hill has entered into an agreement with the owners of the Watch Hill Inn and the Bayside Inn, both on Bay Street, to renovate and manage their unsold condos.

Ocean House Managing Director Daniel A. Hostettler said Thursday that the Ocean House will invest "several million dollars" in the Bay Street properties owned by Peter Catalano and his wife, Dana Valery Catalano, a singer and actress who is the sister of the late singer Sergio Franchi.

The properties will be included in the Ocean House's owner/rental program and will be managed by and affiliated with the Ocean House and Relais & Chateaux.

Although it functions primarily as hotel, restaurant and spa, the Ocean House also includes 21 condominiums, 20 of which are sold, and one that is about to go under contract to be sold, Hostettler said.

Many of the Ocean House condo owners allow the Ocean House to rent their units when they are not using them. The Ocean House and the owners share that income.

Hostettler said the Catalanos originally had 24 condos at the inns, and six have been sold. As part of the agreement, both properties will now be called the Watch Hill Inn, he said.

Of the unsold condos at the former Bayside buildings, 14 will be renovated and turned into seven townhouse units with new kitchens, bathrooms and laundry machines in each unit, Hostettler said. A penthouse and several one- and two-bedroom units in the original Watch Hill Inn building bring the total to 18.

In addition to the condo refurbishing, a private club lounge will be built, and the Watch Hill Inn property will get new landscaping.

The unsold condos will be offered for sale after renovations and will be rented until sold. The new owners then can decide whether they wish the condos to remain in the rental program.

Renovations are scheduled to begin this month. The new Watch Hill Inn is expected to be open for business by the summer.