Hotel developer Anthony Tosswill is not giving up on Dunedin just yet.

The Tekapo businessman said yesterday he would approach the Dunedin City Council in the next week to see if a revised hotel design could yet work opposite the town hall.

Tosswill spent the weekend considering options, after his bid for consent to build a 17-storey hotel and apartment tower on the Moray Pl site was rejected on Friday.

A panel of independent commissioners determined concerns about the building's height, visual dominance, shading and impact on surrounding heritage buildings outweighed the project's benefits.

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Tosswill, speaking yesterday, said he was "astounded" his revised design, discussed during the consent hearing, had been overlooked in the panel's decision.

The revisions included excavating more of the site to lower the building into the ground, and removing floors to reduce its overall height to just 12 storeys above ground, he said.

The changes would also drop the number of apartments in the building's upper levels from 64 to 27, he said.

The reduced height would make the hotel smaller than some nearby CBD buildings, and the gap between what an independent planner wanted, and what he was offering, "minimal", Tosswill said.

He still believed an appeal against the panel's decision would be "futile", but he hoped to meet senior council staff - including chief executive Sue Bidrose - in the next week to discuss a way forward.

"I intend to come down and meet her to see if there is any way back from this decision," he said. "There are some issues to address and I need to ascertain if, at all, what resolve or support DCC can offer to get a five-star [hotel] on the site."

Mayor Dave Cull could not be contacted yesterday, but Otago Chamber of Commerce chief executive Dougal McGowan, who also spoke to Tosswill yesterday, remained hopeful the project could be rescued.

"He [Tosswill] is pretty disappointed but still looking at ways of how he can work with people to make a difference.

"I was really pleased about how upbeat he seems to be, that he is still considering Dunedin as an option and that site as an option."