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Phil Page. Photo: Linda Robertson

Plans for a 17-storey, five-star hotel in Dunedin seem set to be revised after days of  criticism.

Phil Page, the lawyer acting for hotel developer Anthony Tosswill, yesterday told a consent hearing in Dunedin changes to the Moray Pl hotel’s design were coming.

• Fears cathedral garden area will be shaded

Discussions had already begun that were "likely to lead to some refinements in the design of the building", and the hotel’s architect, Thom Craig, was already working on changes, he said.

Mr Page declined to discuss the changes when approached  after yesterday’s session, but more details would be revealed as the hearing progressed, he said.

Mr Page’s comments came as an economic impact report tabled yesterday estimated the project’s value to the city’s economy.

The report by Infometrics put the hotel’s construction cost at $63 million, which would generate a $45.6 million boost to the city’s economy during the 18-month construction period.

The benefits included $16.1 million in "indirect" benefits, as construction companies bought from suppliers, and $8.4 million from workers spending money in the city’s bars and other businesses.

Once the hotel was operating, the ongoing benefits were estimated at up to $25 million a year,  if the 70% occupancy and higher-spending guests anticipated by the developers came to fruition.

A lower occupancy rate of 65%, based on Commercial Accommodation Monitor figures for Dunedin, would still deliver $14.6 million a year, even if guests spent no more than average, it said.

A view along Harrop St showing the proposed five-star hotel.

The report also assumed none of the guests would otherwise have visited Dunedin, and that the hotel’s construction would not displace other building activity and associated economic benefits.

That was not good enough for Dunedin businessman Russell Lund, who, in an hour-long presentation to the panel, criticised numbers underpinning the project.

The Infometrics report made key assumptions that were likely to be "unrealistic" and "simply not credible", he said.

History showed major construction projects did "crowd out" other investments by encouraging delays, including in Dunedin, he said.

The overall economic benefits to the city were therefore "significantly overstated," and he doubted the project could be built for $63 million without "large-scale use of imported materials", he said.

That created quality assurance problems, and the Dunedin City Council needed to be "very careful" to ensure it was not left carrying the cost of a failed construction project, he said.

Mr Tosswill should be required to pay a bond or accept a condition of consent indemnifying the council against any claim arising from shortcomings in the project, Mr Lund said.

He urged the panel to reject the consent application, saying it would have a detrimental effect on heritage views, including those from his own properties.

The "generic" design of the hotel in a heritage city also bucked the international trend, as five-star hotel brands moved towards "boutique" accommodation, he said.

"What we are building in Dunedin is yesterday’s hotel."

A memorandum from the panel yesterday outlined additional information required from Mr Tosswill’s team.

It included a requirement for more information on shading, sunshine hours and temperatures in Dunedin, additional visual simulations of the hotel’s appearance and a response to on-site traffic problems.

The information would be made public by next Wednesday and all submitters would have until August 14 to respond.

The hearing, which continues today, would then resume again on August 17 to hear further submissions on the material and from expert witnesses, who have been asked by the panel to see if they can agree on design solutions.

The panel was also seeking independent legal advice on arguments about planning rules raised by submitters.