Brecon St Partnership last year applied for consent for a 468-room, two-hotel development consisting of four buildings on Brecon St near the gondola base terminal.
Now occupied by an outdoor mini-golf business, the site borders Queenstown Cemetery and Lakeview Holiday Park.
In December, the Queenstown Lakes District Council recommended the application be publicly notified on the grounds the tallest building would be eight or nine storeys and up to 27.7m high.
That is almost double the 15.5m maximum height defined as a controlled activity in Plan Change 50 — the framework approved in 2016 that expanded the resort’s town centre zone by 14.5ha.
Last month, the developer requested its application be put on hold so commissioner Jan Caunter could decide on the issue. In her decision, released last week, she backed the council’s recommendation.
Brecon St Partnership director Graham Wilkinson said the company’s barrister was considering whether to take the matter to the High Court.
"We’re surprised the commissioner has made a different finding than that of three independent experts in urban design."
In her decision, Ms Caunter said the fact three urban design experts had generally supported the proposal’s design and height did not persuade her to support non-notification.
"Their reports go to the merits of the application, not the notification question."
Two had indicated the proposal was at the "uppermost end of what could be acceptable without significant modification", while one referred to the building as being "assertive".
She accepted the assessment of council planning practice manager Blair Devlin the proposal would "literally tower" over the cemetery and affect views from the area.
"This special part of Queenstown is clearly of value to those who visit it for its wide views and its peace and solitude."
She also agreed with Mr Devlin that "special circumstances" applied to the cemetery that justified notification.
The proposal’s lack of an on-site pick-up and drop-off zone was also a more than a minor effect that warranted notification, she said.
