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The Dunedin City Council is footing the bill to process the consent required for the development of the former Loan and Mercantile Building in the harbourside area.
But the chairman of the panel deciding whether to grant consent to convert the building to apartments says the historic agreement has no bearing on the decision.
The no fee arrangement is the result of a council resolution dated September 2011, in which the council agreed any resource consent required for the development and use of the building at 33 Thomas Burns St should be processed at no cost to the applicant.
The resolution was part of a suite of agreements resulting from the mediation process that resolved appeals to Plan Change 7: Dunedin Harbourside.
The plan change would have allowed the harbourside area to be redeveloped with apartments, bars and cafes, but following heavy criticism the council withdrew several aspects of it, including development of the north side of the Steamer Basin, where the Loan and Mercantile Building is located.
Former city councillor Colin Weatherall, who mediated agreements with various appellants to the plan change, said he could not recall specifics, but the resolution meant parties avoided time and money on an Environment Court hearing.
It had always been clear the owner, Russell Lund, wanted to develop that building, Mr Weatherall said, and mediation processes could be wide ranging to arrive at a resolution.
In his 15 years' involvement with the RMA process, he had seen something similar happen several times, if it could avoid a costlier process ensuing, he said.
The chairman of the hearings panel considering the application, Cr Andrew Noone, said the panel would make its decision based on the evidence alone.
''We were told about it, we are aware of it, but that's it. It doesn't have any bearing on our decision-making.''
Council resource consents manager Alan Worthington said the council waived resource consent processing fees in other situations, such as when someone wanted to remove a scheduled tree (because the council had scheduled the tree) or renovate a heritage building (because the council wanted to promote reuse of heritage buildings).
The median cost to process a notified resource consent was $7000.
The minute was confined to just the council's processing fee, and costs for consultants the applicant used were to be met by the applicant, Mr Worthington said.
A council panel last week started hearing Mr Lund's application for consent to convert the building into apartments, but the hearing was adjourned after proceedings took longer than expected.
The development is opposed by nearby industrial businesses, which are concerned about reverse sensitivity issues such as noise and smell and the effect of gentrification of the area on their future enterprises.
Mr Lund has a right of reply when the hearing is reconvened next month.