Council policy and planning general manager Philip Pannett told committee members they had limited grounds to reject the proposed Arrowtown South Private Plan Change 39.
The recommendation to accept was a "procedural issue" and the council would have the opportunity to make a submission itself.
Yesterday was not the time to debate the finer points of the proposal as it would return as a full council agenda item and in a workshop, Mr Pannett said.
In response to concerns by Cr John R. Wilson, chairwoman Gillian Macleod agreed the council needed to make it clear to the community that PPC 39 was being accepted into the council process along with the authority's own proposed inter-related plan changes 29 (Arrowtown boundary) and 30 (urban boundary framework).
Mr Pannett described the acceptance as "a neutral position" and Cr John Mann said there was "no risk" in accepting PPC 39 with plans 29 and 30 in play. All three plan changes were likely to have the same submitters.
The committee approved the tabled plan change hearing format.
The format means two councillor commissioners and an independent commissioner would hear submissions on the urban boundary network and Arrowtown South.
However, two independent commissioners only would hear submissions on the Arrowtown boundary.
Mr Pannett and senior policy analyst Mark Rushworth recommended councillors step aside on PC 29 as the council had made a submission to include its land, the Jopp St ponds area, and that raised potential concerns for conflict of interests.
Membership of the panel would be discussed next month and the PC 30 hearing could start in March, the committee heard.
Speaking in the public forum, Arrowtown South planner John Edmonds said the group of eight landowners behind PPC 39 were prepared to extend the public submission period from four to seven weeks to cater for non-residential ratepayers and residents returning from holidays.
Mr Edmonds told councillors the group would hold an open day before Christmas at the start of the public submission period and later in the period after New Year's Day.
Location signs would be installed on site to display how the zone would be laid out.
A pamphlet summarising the proposed plan change 39 will be distributed in Arrowtown this month.
Mr Edmonds said the landowners believed Arrowtown South and the council's own plan changes "are so closely related you can't differentiate" and it was the group's opinion the same commissioner should chair all three hearings.
Mr Edmonds attended the forum with Mt Soho Trust landowner Roger Monk, the largest landowner in the group of eight involved in the proposed development.
Council senior policy analyst Karen Page told councillors the earmarked land featured seven dwellings, sparse vegetation, mostly around an unnamed creek, and an escarpment.
Urban design principles of the plan change included a distinct entrance to Arrowtown and high public amenity that reflected the character of "old Arrowtown".
Cr Cath Gilmour asked if children's playgrounds were included. Ms Page said playgrounds would be looked at as part of the process.
