A proposal to establish a special housing area (SHA) for a 201-unit retirement village near Millbrook has been turned down in favour of a similar development closer to Arrowtown.
The Queenstown Lakes District Council recommended to Building Minister Nick Smith the land on Ayrburn Farm wanted for the village not be designated a special housing area (SHA), which would have paved the way for the retirement village.
Opponents Jill Beadle and Robyn Hart were both primarily concerned about potential degradation of the waterways, in particular Mill Creek and Lake Hayes.
Resident Wendy Clarke said the application was a misuse of the SHA process.
While10 two-bedroom houses would be provided rent-free to retirement village employees, and any surplus houses made available to the Queenstown Lakes Community Housing Trust, Mrs Clarke said that would not provide any affordable housing.
"Free houses for staff is a ploy to get it over the line.''
Ayrburn had previously applied for a residential development on the same site, but that was rejected by the council last June and is now the subject of a High Court review.
Speaking in support of the application were realtor Chris Campbell, heritage consultant and architect Jackie Gillies, planner John Edmonds and lawyer Warwick Goldsmith, who appeared on behalf of developer Chris Meehan.
Ms Gillies said without an "economically viable use'' several historical buildings on the site could be lost, while both Mr Campbell and Mr Edmonds raised the lack of options for the ageing population.
Cr Lyal Cocks asked Mr Edmonds why, given that reasoning, Ayburn's first application was not for a retirement village.
While he was unable to answer that, Mr Goldsmith said he believed it was because residential development under the Housing Accords and Special Housing Areas Act was "much easier''.
Cr Scott Stevens said the council was addressing the potential shortage of retirement options by recommending to the minister the other Arrowtown proposal proceed.
"I think it's important to remember that every application doesn't need to be accepted just on the basis there's a market need for it.''
Cr Calum MacLeod said he appreciated the future challenges for the district posed by its changing demographic, but having read all the policies, applications and submissions he equated the process to "rolling around in a muddy pool''.
He supported the advice of planner Anita Vanstone not to recommend the proposal to the minister.
Councillors voted unanimously not to recommend the Ayrburn proposal to the minister.
However, they recommended the minister approve another retirement village on McDonnell Rd, south of Arrowtown, as a special housing area.
Two other special housing areas were discussed at yesterday's meeting.
The council recommended to the minister the Gorge Rd Business Mixed Use Zone, for an apartment development of up to six storeys, at least 30% of which would comprise studio, one or two-bedroom units, and a 95-unit development at Shotover Country be progressed as SHAs.
