A district plan change is being sought in the wake of a failed $500 million five-star hotel and international golf course development at McArthur Ridge, near Alexandra.
A private plan change was approved in 2008 to pave the way for the venture, when 645ha of land, 6km northwest of Alexandra was rezoned to become the McArthur Ridge Resource Area (MRRA), in what was billed as one of Central Otago's biggest developments.
The project was to include visitor accommodation, an 18-hole golf course, hotel lodge, a 200ha pinot noir vineyard, luxury spa complex and up to 1376 residential units.
However, the development, proposed by Melview (McArthur Ridge) Ltd, stalled, and today the Central Otago District Council's hearings panel will consider a request to return the area back to its original rural resource zoning.
Paterson Pitts Group director Peter Dymock applied for a zoning change on behalf of the Canterbury Mortgage Trust.
Central Otago Pinot Noir Estates Ltd and Thyme Field Ltd, which own 77% of the land within the area, are insolvent and the trust is their mortgagee, he said, therefore it controls the land.
Melview, which sought the plan change in 2008, owns the remaining 23% of the area.
Mr Dymock said there were now ''significant areas of well-tended vines'' in the area but all existing dwellings and buildings associated with viticulture in the area were outside the MRRA.
''The fundamental issue at stake is that the current zoning of the site is specific to a particular development that will never be realised,'' Mr Dymock said in his application.
''It is now apparent that there is not, was not, and likely never will be, a market for a development of the scale and nature envisaged by the MRRA in this locality.''
The trust did not want to proceed with the development.
Because of the integrated nature of the development and the zoning provisions, the project could not proceed over the balance of the area if either of the two parties involved did not proceed, he said.
It had been set up in the district plan as an ''all-or-nothing'' development, so either the development as a whole proceeded or no other land use was possible on the existing titles.
The zoning therefore prevented alternative uses of the site, Mr Dymock said.
The trust wanted to dispose of its land for normal rural purposes, including more viticultural development, or for other rural land uses.
Other uses being looked at included large-scale rural intensification such as cropping, dairy grazing, baleage or lucerne, in conjunction with the proposed Dairy Creek Irrigation Scheme.
Conventional farming or rural residential use of the existing titles was not possible under the current zoning, he said.
Council planning consultant David Whitney recommended the plan change proceed.
Four submissions were received on the proposed plan change, including one from McArthur Ridge Investment Group Ltd, which was the ''successor'' of Melview (McArthur Ridge).
The group, which owned 23% of the site and two other neighbouring properties, opposed the plan change.
In the group's submission, Fraser Goldsmith said if the area reverted back to rural resource zoning, activities could take place that might detract from the special lifestyle and environmental character of the area.
