Neither Thiel or his company Second Star has withdrawn their application, Julian Haworth told RNZ's Nights.
"The articles in the mainstream media, in my opinion, are pure speculation. The fact that Second Star, which is Peter Thiel's company, did not appeal the Environment Court decision does not mean that they've given up on developing the site.
Thiel planned to build the enormous lodge on the edge of Lake Wānaka, 7kms from the town.
The proposed development first went to council who rejected the plans, which Thiel's company appealed, and it all ended up in the environment court, Haworth said.
After three days of consideration the Court turned it down too.
The development is out of scale with the environment, said Haworth.
"How long do you think our outstanding natural landscape would last If we set a precedent for allowing buildings that that stretched for 330 metres across the landscape?"
Artist renderings of how the building will look tended to airbrush inconvenient elements, he said.
"They never put in all the access ways and cars and all the clutter that you get around developments that all stays out of their pretty picture. It doesn't fit into that landscape anywhere near as well as those pictures look, and that's what the court found."
The building was deigned by a man who designed an airport in Tokyo he said.
"Designing an airport in Tokyo is very different to try to fit a building into the outstanding natural landscape of New Zealand and this landscape wouldn't last for long as being outstanding if we keep allowing buildings like this."
The application pushed the economic benefits to the region the lodge would bring, Haworth said.
"We have to trust Mr Thiel that he was going to create a lodge with very upmarket lodging at $2000 a night, that kind of thing. But of course, it could just be a bolt hole for him and his family and friends, we don't know that, and you can't do anything about that once the consent has been granted."
There were other more suitable sites for such a development, he said.
"Why would you wreck the outstanding natural landscape with these huge buildings, when there's another sort of landscape, which is less precious, called rural character landscape in the Queensland Lakes district, a lodge developed there would fit in much better, have much lower adverse effects and would still bring most of those economic benefits in."
Thiel already had consent for a more modest development on the site, he said.
"The society is actually very happy with that, that the way it was sighted, the size of it, we think that would have fitted into the landscape, the thing that he's proposing is about 15 times as wide as that, and stretches across the landscape.
"And that's the problem, the adverse effects shoot up, and you can see it from the lake, see it from the walking tracks, the beautiful walking track that we have.
"I mean, the Te Araroa track, which is the length of New Zealand, goes right past this lodge."
He believes the saga doesn't end here.
"I think that Second Star will come in with another application in a few months' time, it will be a bit smaller, a bit better fitted into the landscape, and they will go through the process all over again. And that's what you can do when you've got $10 billion."
