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Mr Thiel, the director of Second Star Ltd, wants to build a 330m-long, grass-roofed complex, comprising 10 guest accommodation units with a basement floor level of 1165sq m, a private "owner’s pod" with a floor area of 565sq m, a 40sq m meditation building, and back of house buildings.
Upper Clutha Environmental Society secretary Julian Haworth said he was concerned "many thousands of people" would be able to see the building from the lake and from the Glendhu Bay Track.
The applicant had not provided enough details and had not offered a covenant preventing further site development as a condition of consent.
The total volume of proposed earthworks (37,100cu m over an area of 73,950sq m) was "playing God with the landscape".
"When you have to do a large quantity of earthworks like this you have to question whether you have the right location for the buildings," Mr Haworth said.
Council senior planner Sarah Gathercole and the council’s landscape architect consultant Richard Denney recommended consent be refused because the development would have a moderate to high adverse effect in the outstanding natural landscape.
Independent commissioners Ian Munro (chairman), Wendy Baker and Glyn Llewers adjourned the hearing on May 24 after requesting more information about a "back of house" building, for which no design plans had been lodged.
Chairman Ian Munro also asked for draft consent conditions, which the applicant had not presented and the applicant’s planner, John Edmonds, was directed to work with the council’s senior planner Sarah Gathercole on the final set of conditions.
A June 10 deadline was set for the applicant’s lawyer Michael Holm to file a written right of reply.
Mr Munro stressed the commissioners had not made up their minds.
They could not make a decision without full information.
"Although we are discussing conditions of consent, that should not be taken in any way an inclination on our part that we are going to grant consent," he said.
As part of that, Mr Munro also requested more details about a proposed planting programme and a possible on-site nursery mentioned during evidence but not in the application.
The commissioners will make a second site visit next week. Mr Munro said during the hearing they needed to visit parts of the Glendhu Bay Track, to better understand the evidence they had received.
This was something they had not previously been able to do, because of bad weather.