Independent commissioner Denis Nugent, on behalf of the Queenstown Lakes District Council, this week issued consent for the Five Mile development proposed by Queenstown Gateway Ltd, with a Countdown supermarket as a major tenant.
The Frankton site is adjacent to land owned by Shotover Park Ltd, which has Environment Court approval for a Pak'n Save supermarket.
In a statement yesterday, Shotover Park Ltd said it would challenge the council's decision in the High Court.
"SPL has to date resisted lodging judicial review proceedings in the hope that council would ensure that the matter be notified for public submissions before reaching a decision as to whether or not to grant consent," the statement said.
"This has not happened and the recent decision continues a process of flawed decision-making under the RMA [Resource Management Act]."
Queenstown Gateway acquired the land in 2009 after previous developer Dave Henderson was declared bankrupt. The excavated site has been a feature of the area since work began on an underground car park in 2006.
Mr Henderson first lodged consent applications for his Tuscan-style village, also called Five Mile, 13 years before receiving permission to start work.
Queenstown Gateway director Tony Gapes is also a partner of Queenstown Central Ltd, which is appealing consent for the adjacent Pak'n Save on environmental grounds.
In granting consent for Five Mile, Mr Nugent said the proposal met objective six of the district plan in providing attractive and integrated development.
Judge Jon Jackson, who presided over the Pak'n Save and associated Mitre 10 Mega hearing in the Environment Court in June, referred to the same objective in his decision to grant consent for that supermarket.
Judge Jackson ruled the proposal "is expressly contemplated by the most relevant objective in the operative district plan" in providing both integrated and attractive development.
Mr Gapes told the Otago Daily Times earlier this month the court was wrong to grant consent ahead of the conclusion of an ongoing land zoning process for the Frankton Flats area.
Queenstown Gateway's land was already zoned for retail, while the Pak'n Save site is industrial land, which is in short supply in the resort, Queenstown Central Ltd and the council say.
In Mr Nugent's report, architect Richard Denney is quoted as saying "given the recent Environment Court decision to grant consent for a supermarket near Glenda Dr within the rural general zone and the pending decision for the Frankton Flats B zone, the landscape is poised to become a more significant urban area within the Wakatipu Basin".
Attempts to contact Mr Gapes for comment were unsuccessful yesterday.
