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The Dunedin City Council's hearings committee, in a decision released this morning, has declined to grant resource consent for the controversial hotel and apartment tower.
The decision comes after Betterways Advisory Ltd's bid to build the hotel on industrial land at 41 Wharf St prompted a public backlash, with 507 submissions mainly opposed to the development.
Committee chairman Cr Colin Weatherall said the committee was aware of the value of the investment opportunity on offer, "but we had a job to do".
The hotel failed to meet either of two legal threshold tests within the Resource Management Act, which required the effects of the hotel to be no more than minor or overall not contrary to district plan rules.
"Having made these determinations, we are unable to grant consent.”
The decision is subject to an appeal period of 15 working days.
The Wharf Street site is zoned Industrial 1. Commercial residential activity and residential activity are considered to be non-complying activities under the District Plan and so a notified resource consent process was required.