Goldfields Investments Ltd is negotiating with the Queenstown Lakes District Council to provide a $30 million to $40 million visitor accommodation complex on the 4650sq m section in Frankton Rd.
Goldfields took the council to the Environment Court in October 2007 to appeal against the council's decision on Plan Change 10 of its partially operative district plan decision on the high density residential zone.
The council agreed to mediate with the company and discussions are ongoing.
Goldfields owner and managing director Noel Fitzgerald, of Queenstown and Timaru, said the section had been empty for almost four years and used to feature the 25-room Goldfields Motel block on about 35% of the land - "a poor advert for Queenstown", he said.
Mr Fitzgerald said two independent assessors valued the section at more than $2000 per square metre last year, which was comparable to adjacent land values.
He did not think it had diminished in price since then.
"We're envisaging 68 hotel rooms, 16 self-contained 160sq m townhouses and [an] affiliated club [with a] restaurant and reception back of house.
We have put a concept to the council, the council has supported it, so it's a matter of a couple of months before specific use of the concept is granted."
The serviced site incorporated three freehold titles - one about 1000sq m and two at 1800sq m - and offered 100m of road frontage.
Mr Fitzgerald said an advantage of the site was the 20m-deep gully on the lake view side of the land, which prevented the proposed visitor accommodation from having its panorama blocked by another development.
He had received "half a dozen" inquiries since the board inviting expressions of interest was installed last Christmas, and he was still open to inquiries.
"We've had people wanting to land bank it and I've turned them down.
I've carried the cost of this property for four to five years and I'd like someone with clout and money to do their best for the site.
It's a one-off chance to do something interesting at the main entrance to the central business district.
A prudent investor or developer would see a long future with this site."
Mr Fitzgerald's company was involved in the BP service station development in Frankton, plus the Lake Tekapo Scenic Resort and the 60-room hotel refurbishment of Ben Venue, in Timaru, in 2001.
He also owns 22,000sq m of flat land next door to BP, which is earmarked for commercial activity.
The proposed development is in equal partnership with Russell Lund, owner of building company Lund South Ltd.
"Gorge Rd businesses have expressed very strong interest in relocating out there for the 220m of state-highway frontage," Mr Fitzgerald said.
