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The public reaction to the new proposal for a five-star hotel in Dunedin seems to be largely positive, but will the project face the same uphill battle of its predecessor?

The new proposal comes courtesy of NZ Horizon Hospitality Group Proprietary Ltd. The ''anonymous'' principal developer is Tekapo businessman Anthony Tosswill, and the Dunedin frontman and architectural designer is Ken Taylor. The project follows the failed Chinese-backed 27-storey glass waterfront hotel proposal by Betterways Advisory Ltd.

The Betterways project was much more complex and stalled early on. The new proposal will have fewer complicating factors to consider.

To this end, it is clear why, after a year of informal talks, the Dunedin City Council this week announced a memorandum of understanding with the developer to progress to the first stage: geotechnical work on the site.

According to Mr Taylor, most people support the hotel. As well as council heads, these include (unsurprisingly) the heads of the Otago Chamber of Commerce, Dunedin Venues, Enterprise Dunedin and the University of Otago.

Heritage advocates are unconvinced, however. That is predictable. The city is riding high on a redevelopment wave, thanks to the hard work of enlightened heritage advocates and developers who are rescuing the city's neglected older building stock and revitalising areas in the process.

It is understandable there is caution from some quarters. Visitors may get to luxuriate within the walls of a five-star hotel, but it is residents who must live with the building.

Thus, the visual elements of size and design will be significant - particularly when the project up for consideration is in a prominent spot in the heart of a city whose hallmark is its striking historical architecture.

It will never be possible to satisfy everyone, of course. Even a relatively innocuous piece of street art or public art can cause outrage. And there is no small element that thinks Dunedin has a reputation of being ''anti-progress'' and is full of ''naysayers''.

The council is clearly eager to progress such a project. The Filleul St site has been discussed as suitable for decades. The new proposal (and it is just that; no consent has yet been lodged) doesn't adhere to the current planning rules.

Indeed, it busts the ''central activity'' zone's 11m height restriction by several times that. Even under the council's next generation plan, a revised ''central business district'' zone would only allow for a building to be a maximum of 16m and four storeys high.

But the developer and council will be aware a starting point is necessary. Rules are made to be tested. The developer is ''aware height is an issue''.

There could be compromises. But its economic argument will be that it must build up. During the resource consent process, the height issue will be weighed up against the economic benefits to the city, which surely stack up.

The city desperately needs more accommodation and high-quality accommodation. When there are stadium concerts or graduations, rooms are at a premium.

When big events coincide, the city simply doesn't have the capacity. Visitors are regularly forced to stay out of town.

Fleetwood Mac band members and Elton John left immediately after their concerts because there was nowhere suitable for them to stay for the night.

Proponents of the project are right in many aspects. We are right to target the high-end market, and we need to send a message that Dunedin is open for business.

But we also need to footnote that with caution. Our heritage is a drawcard. It should not be compromised. Can we be both bold and beautiful? Time will tell.