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Heavy machinery will move on to Dunedin's Filleul St car park within days to explore its suitability for an 18-storey five-star hotel.
Dunedin City Council property manager Kevin Taylor, in a statement yesterday, said the council had contracted a geotechnical engineer to begin studying the site.
The work would require heavy machinery, including a drilling rig, to begin testing and sampling work, he said.
The rig would be on site for up to three weeks from Monday, drilling up to eight sonic bore holes.
Core samples would then be sent for analysis and groundwater monitored, he said.
Sections of the council's car park would be closed for short periods while the work was carried out, but other parks would be made available for those who could not use their leased car parks as a result, he said.
The council was paying for the geotechnical work, which was expected to cost about $50,000, Mr Taylor said.
Results were expected within three months and would be provided to the development company, NZ Horizon Hospitality Group Proprietary Ltd, minutes of a council meeting to discuss the deal showed.
The company would then have first option to buy the council land at market value.
The company had also requested relief from development contributions, worth $1 million, as a condition of any purchase, the minutes, released to the Otago Daily Times yesterday, showed.
However, the request would be considered only when a purchase agreement was sought by the company, and decided with reference to the council's development contributions policy, councillors decided.
Councillors voted 12-0 to support the agreement, with Crs John Bezett, Hilary Calvert and Richard Thomson absent.