Urban Splash announced last week their proposals for the hotel following the news of their £4 million grant from the North West Development Agency.
But, while there appears to be broad support for their hotel plans, there is already mounting public concern about suggestions that the development of residential properties may be part of the regeneration company's ideas for the former Bubbles and Harbour Band Arena sites next to the hotel.
Urban Splash has a two-year 'exclusivity' agreement with the city council which, in effect, means that the authority won't listen to any other planning proposals for that site until the company has brought forward its own scheme.
The Manchester-based organisation has made early suggestions of a mixed-use development, possibly incorporating new artworks, offices, shops, restaurants, a performance venue and, crucially, the potential for some kind of residential accommodation.
A city council development brief leaves the door open for such a scheme but says that any residential use must not be of a 'family housing' nature. It must be on upper floors and 'shown to be necessary as an integral part of a mixed-use scheme to regenerate the whole site'.
There have been suggestions that Urban Splash might be looking to 'recoup' their investment in the Midland by developing and selling residential properties on that seaward site.
But at last week's press briefing The Visitor specifically asked Bill Maynard, Urban Splash's project director for the Midland scheme, if the hotel redevelopment was dependant upon the company being successful in its plans for the adjacent site.
The quick answer was 'no'.
Mr Maynard expanded: "This is a stand-alone project and we will crack on with this development now that the funding has been secured."
But he said it would be naive to think that the adjacent site would have absolutely no bearing on the Midland.
"Its long-term success - and, indeed, that of Morecambe - depends on the wider picture.
"Wherever we have been successful we have always wanted to look at that broader aspect, working with local communities to bring developments that improve the vibrancy of an area."
He added that Urban Splash intended to launch an international competition through the Royal Institution of British Architects to bring forward ideas 'about how this great space can best be used'.
Paul Jones, Urban Splash project manager, said: "We have a good record of working with local communities to bring about developments that they can be happy with as well.
"We will be relying to a great extent on them being right behind a scheme that can improve the vibrancy of their town."