A council spokesperson said in March this year that council approval was required due to several "District Plan" infringements.
The building plans exceed the maximum 10m height limit within Napier's Inner City Commercial zone.
A portion of the building would reach a maximum height of 16.11 metres.
"The design, and more specifically the effect of the height infringement on Art Deco heritage buildings is currently being reviewed independently by a local architect.
"The application is currently 'on hold' (has not been approved), awaiting this independent heritage impact review."
The review was expected to be completed within a couple of weeks of the architect's assessment.
A council spokesperson has said that some amendments had been made to the original design.
"There have been some design amendments made at Napier City Council's request, but the height is still about the same."
The hotel is one of four accommodation proposals which could add more than 300 rooms to the hospitality market in the city.
Another hotel, still in the concept drawing stage and expected to have about 100 rooms, targets the Rebel Sport site and neighbouring properties.
They have been bought by an Auckland family company called Nautilus Family Trust Ltd, with the boutique hotel part of the plans.
Council say they have yet to receive any applications for the current Rebel Sport site at this stage.
The trust was unable to be reached for comment.