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The Dunedin City Council has entered mediation talks with a developer aimed at avoiding an Environment Court battle over a rejected retail complex in Green Island.
It was confirmed this week Irmo Properties Ltd had lodged an appeal with the Environment Court, after its plans to convert a World War 2-era iron roller mill building into a retail centre were dismissed in August.
The Dunedin City Council's hearings committee declined consent amid fears a retail development in an industrial zone could undermine the council's district plan.
However, Irmo Properties Ltd - represented by law firm Russell McVeagh - argued in its appeal the decision "suffers from significant legal errors" and was "wrong".
That included comments by Cr Colin Weatherall, in the committee's written decision, describing the building's claimed heritage value as "somewhat overstated".
The appeal argued the committee had no evidence to support the statement, given "clear and undisputed" independent expert evidence of the building's historical significance, which had been accepted by a council planner.
The appeal also said the committee had erred in taking "irrelevant" matters into account, including the continued viability of the site for industrial use, the need for the retail centre at the site, and whether alternative retail-zoned locations existed elsewhere.
Irmo Properties director Grant Chirnside declined to comment, but a copy of the appeal was released to the Otago Daily Times by council staff upon request on Monday.
Cr Weatherall said when contacted the parties had so far engaged in "positive discussions" during mediation, but any resolution was expected to be "a couple" of weeks away yet.
Irmo Properties would be free to return to the Environment Court if talks collapsed, with a hearing likely in the first quarter of next year, he said.
If agreement was reached, a possibly revised consent order would be signed off by the council.