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The Northlake Investments Ltd consent application was for the hotel with restaurant, bar and gym, and an off-site park for four coaches, located in North- lake's commercial village.
None of the 141 submissions made before a hearing in May, was in support.
Independent commissioners for the Queenstown Lakes District Council, Ian Munro and Jane Sinclair, noted in their decision the submission of Northlake's lawyer Warwick Goldsmith that the site was zoned for visitor accommodation ''and that the proposal complies with all relevant bulk and location standards''.
They also noted evidence from development manager Marc Bretherton that the change from a business park to a hotel was a commercial decision.
Mr Bretherton said finding commercial business tenants who wanted to operate from a peripheral Wanaka business park was a challenge, ''whereas Wanaka currently has a shortage of hotel rooms''.
The commissioners acknowledged submissions from the Wanaka Community Supporting our Northlake Neighbours Incorporated Society and others, that the hotel was too big to fit in with the neighbourhood, was poorly located and would not serve the local community, but also noted the response from Mr Goldsmith that the submissions should be given little weight because they were hearsay or lacked expert evidence.
The commissioners did not consider the inability of Northlake residents to make submissions - because of a ''no-complaints'' covenant in sale and purchase agreements - impeded their ability to consider adverse effects on residents ''and reach reasoned and appropriate findings on the matter''.
The commissioners considered the hotel would have a similar overall effect to a business park but it would have ''more than minor adverse'' effects on residents of Merivale Ave and part of Mount Creighton Cres, whose views would change from a tennis court to a hotel.
However, they considered conditions imposed would avoid, remedy or mitigate ''all adverse effects''.
One condition required Northlake to provide a new tennis court on a nearby reserve before the existing tennis court on the hotel site was removed.
''We find that on overall balance the proposal is in line with the outcomes sought by the operative plan provisions for the Northlake special zone and that consent should be granted, subject to conditions.''
Northlake residents spoken to yesterday said they were disappointed but not surprised by the decision.
Representing the Northlake neighbours society, Niamh Shaw said she could not understand how the law could support the decision ''in light of the [council's] recommendation to refuse the application, allied with unanimous community opposition''.
''Building a large-scale commercial hotel in the midst of a residential suburb is morally and ethically questionable, and quite obviously contrary to the wishes and wellbeing of the immediate neighbourhood.
''We will be looking into appealing this decision at the Environment Court.''
Developer Chris Meehan said in a statement yesterday the site was zoned for visitor accommodation, and ''the design has been refined in response to feedback through the resource consent process.
''We are now looking forward to progressing to the next stages of design and planning.
''Works are proposed to commence in spring.''