Dunedin Mayor Dave Cull wants to work with the developer on a new five-star hotel for the South Island city that just got turned down.
On Friday plans for a 17-storey hotel and apartment complex in Dunedin were rejected because of the visual impact and "shading effects" on parts of the central city.
NZ Horizon Hospitality Group wanted to build the hotel in Moray Place, on the southern side of the Octagon. It would have 210 hotel rooms, 64 apartments, four penthouse suites, hospitality, retail, and conference facilities and parking.
Mr Cull said he was supportive of a five-star hotel being built in the city where visitor numbers are growing and more events are being held.
"I am disappointed at the outcome of NZ Horizon Hospitality Group Ltd's application because both I and the council have been clear for some time that we would warmly welcome an appropriate five-star hotel in the city," he said.
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He said he respected the independent hearing panel's decision as the design did not meet the community's expectations as expressed in the District Plan.
"My hope is that we can continue working with the developer to explore the options now available to enable a five star hotel to be built, in keeping with the regulatory framework."
The decision is subject to an appeal period of 15 working days.
"Because we are now in an appeal period, with an opportunity for mediation, I won't be making any further comments," Mr Cull said.
The application was heard by independent commissioners chairman Andrew Noone, Stephen Daysh, of Napier, and Gavin Lister, of Auckland.
The application attracted 271 submissions, most of which opposed the project.
In 2013, a $100-million, 27-storey, five-star hotel on the city's waterfront was also rejected, with reasons including that it would be out of character with surrounding buildings.