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The Environment Court has declared it has the jurisdiction to hear and determine the notice of appeal on Arrowtown South lodged by two of its landowners.
The amended version of plan change 39: Arrowtown South (pc39) proposes 19 urban-residential allotments and 23 rural-residential allotments, including one existing dwelling.
This is a far less dense development than the 226 dwellings controversially proposed for Arrowtown South almost four years ago.
Judge Jon Jackson also timetabled the exchange of evidence between parties, beginning on August 30 and ending with the Queenstown Lakes District Council, as respondent, lodging copies of all evidence with the Environment Court in Christchurch on November 1.
Arrowtown South is the name given to 31ha in nine land titles in different ownerships bounded by Arrowtown to the north, the Arrowtown Golf Course to the south, Centennial Ave to the east and McDonnell Rd to the west.
The appellants, Cook Adam Trustees Ltd and farmer Roger Monk, asked the council in September 2009 to make a plan change that would create a special residential zone and small commercial village precinct from their rural general-zoned land.
The council accepted the request as pc39 in November 2009 and publicly notified it.
About 500 submissions opposed, about 100 supported and others were more ''nuanced'', Judge Jackson said in his decision.
After a hearing, commissioners for the council refused pc39 in November 2010. The appellants lodged an Environment Court appeal in January 2011 seeking that the plan change be granted with modifications to sort out adverse effects or concerns.
Despite opposition, the court ruled plan change 29 should be heard before Arrowtown South because if the urban boundary did not move under pc29, the appeal on pc39 would be withdrawn.
Judge Jackson said in his decision, dated July 10, the aim of pc39 appellants to pursue an amended version of their plan change was partly due to the Environment Court's decision that the urban boundary should move only a small distance south, far less than was sought and not over the whole of Arrowtown South.
Inside the new urban growth boundary is zoned urban density housing, while outside the boundary, where most of Arrowtown South lies, is zoned rural-residential.
Judge Jackson decided the rural-residential or rural-lifestyle use for Arrowtown South now sought by the amended pc39 was within the range of possible outcomes. However, he made clear he was not making a determination on an outcome right there.
He concluded any development of Arrowtown South should consider not just landscape and amenity, but also the ecological improvement of the stream and wetland in the area.
He said the appellants could not exclude the small holdings that they did not own from the court's consideration. The area covered was all of Arrowtown South as described in the notified pc39.
He also said the court might need evidence the proposed residential allotments on McDonnell Rd ''are not simply very spacious suburban subdivisions with a tendency to subsequent infill ... precisely the adverse effects [interested parties] fear.''