Workers have found asbestos and lead paint in the Algonquin Hotel. (CBC)

The new owners of the historic Algonquin Resort in St. Andrews say asbesos and lead paint were discovered during the hotel's renovations.

The iconic hotel has been shut down for two months as the older building undergoes a major face-lift.

Guido Kerpel, the vice-president of Canadian operations for New Castle Hotels and Resorts, the new owners of the Algonquin, said that the asbestos was not a complete surprise.

"This is not something that's totally unexpected; I mean, we are talking about a 100-year-old building," he said. He added that it is important to take proper precautions with hazardous old building materials.

"When you do a big renovation like that you find surprises like that, and you work through WorkSafeNB to make sure that it is abated in the right fashion," he said.

The asbestos was located in between two walls in the washroom areas and lead paint was found on some exterior windows.

Kerpel said that getting rid of the asbestos and lead paint is just one of the additional costs that came up during construction.

“Renovations are a funny thing. Once you start working on one project, you always find something else you want to address," he said.

Businesses said this week the Algonquin's renovations have left a gap in tourism.

During the renovations, the resort cut back staff and left only 51 of its rooms open.

In March the New Brunswick government sold the historic hotel to New Castle Hotels and Resorts and Southwest Properties and provided a $21-million repayable loan to the companies.

As part of the deal, New Castle Hotels and Resorts and Southwest Properties are to ante up $4 million in contributions and incentives. New Castle Hotels and Resorts is responsible for six hotel properties in Atlantic Canada.

Guests will not be affected

Kerpel says he did not feel the asbestos and lead paint would affect guests.

"It's in areas away from guests and staff. It's in between two walls in the bathroom where the pipes are that provide hot and cold water to the shower and bathtub,” he said.

He added that even when guests were in the hotel last year, they would not have been exposed because the asbestos was never airborne.

"It's only when asbestos is airborne that it can become dangerous."

The new owners are now looking at additional upgrades to the facility. Kerpel said that the building also needs upgrades to its exterior.

"In order to winterize the building we need to replace the roof. That we had not factored in so that's a significant additional cost that we have to figure out,” he said.

According to New Castle, the resort is still on track for its June 1, 2013 re-opening. When it opens its doors again, the Algonquin will be a part of Marriott's Autograph Collection, a brand of luxury hotels.

The Tudor-style Algonquin hotel was built in 1889 by the St. Andrews Land Co. The hotel was once owned by the Canadian Pacific Railway Co.