Lawyer for the ministry Lauren Semple said at a hearing yesterday about the planned demolition the public benefit of the hospital could be taken into account if it was "highly likely" the build would go ahead.
The ministry has applied to demolish the former Cadbury factory buildings in Cumberland St, but the buildings are considered to have heritage value.
Demolition can only be contemplated in certain circumstances and Ms Semple argued the significant public benefit outweighed the loss of heritage where there was no reasonable alternative to demolition.
Independent commissioner Gary Rae asked questions yesterday of both the ministry and the Dunedin City Council to clarify their positions on some points and discuss possible conditions for granting consent for demolition.
Few obstacles remain to Mr Rae granting consent after neighbouring business Allied Press — publisher of the ODT — withdrew its opposition to the application and Heritage New Zealand agreed to some amended conditions.
One point that had been raised by submitters related to the gap that would be left if demolition went ahead but the hospital build then stalled.
Ms Semple tackled that topic yesterday.
"A significant amount of money, time and public political commitment has been expended on this project," she said.
The Crown owned a significant amount of land that could only be used for health purposes, she said.
"We are now into the preliminary design phase, planning for the procurement of contractors is now well under way and demolition of other buildings on site has begun.
"It is the applicant’s position that it is significantly more likely than not that the hospital will proceed on this site."
Ms Semple said the applicant had gone to a lot of effort to see if there might be a way to retain building facades, but doing so would severely compromise the overall project.
The dairy and machine house building at the site would be retained.
A decision about demolition is expected next week.
