yep the work on that place seems to have been going on for ages - Easter 2006 it had been stripped back to a bare rusty shell of a building ... but we were there a couple of weeks ago and it looked like it was getting a bit nearer to completion - and it certainly still looked liked a hotel.
it's well known amongst windsurfers for blocking the wind on the beach next to it, meaning you have to swim your board out beyond it to get to the wind line
we stayed in the Hotel Medano (on the town beach / square) on our recent visit - now that's a nice place