A five-star hotel is worried it will lose a million-dollar guest that takes up the top floor of its southern wing "365 days a year" if a social housing plot next door is developed.
Chateau Marlborough has opposed plans by Kāinga Ora, the Government's housing provider, to turn four state homes into 10 one-bed units in Blenheim's inner circle.
Chateau Marlborough chief executive and director Brent Marshall told a hearing last week the third floor of the hotel's southern wing, closest to the proposed housing project, was contracted out to a national company year-round.
The company's identity was confidential, he said, but its employees did shifts that often required them to sleep during the day, when construction was due to take place.
Construction noises during the build could affect the workers and jeopardise the contract, which made up one-sixth of the hotel's revenue.
"If we lose that contract... [then] as a result of that our staff numbers would sadly need to be cut," he said.
The hotel had asked the company if its employees could be relocated to other rooms during the building phase.
"But the message back from their parent company was very clear: relocating would not be workable," he said.
Kāinga Ora's noise expert Rhys Hegley said construction would begin with a 1.8m-high acoustic fence built around the new social housing site, but that a temporary 5m screen could be put at the hotel's boundary.
This would block noise to all three of its floors, he said.
But Hegley said noises during construction should not breach regional rules, and that one of the loudest machines would be on site for just six of the 40 weeks.
Two of the proposed units were planned for a section Chateau Marlborough wanted for its expansion along Charles St. The hotel wanted to add another 30 rooms to its southern wing, a penthouse conversion and a rooftop bar.
It bought 1 Richmond St, which bordered the other end of the Kāinga Ora land, in October last year, hoping to swap it with Kāinga Ora for 104 Charles St, closest to the hotel, but Kāinga Ora declined their offer.
The hotel submitted against Kāinga Ora's request to develop the sites in April, concerned demand for on-street parking and traffic levels would escalate if the new houses were built, increasing the amount of "unauthorised people" parking at the hotel.
Kāinga Ora's lawyer Douglas Allan said at the hearing last week construction was always temporary and "omelettes require broken eggs".
"As a society we... can't stop construction simply because the effects of it might upset people," he said.
Council resource management officer Tracey Hewitt wrote a report on the application ahead of the hearing, recommending it be approved, after finding negative construction effects on the hotel were "unavoidable".
But lawyer David Clark, for Chateau Marlborough, said it wanted consent conditions promising to mitigate noise.
Independent hearing commissioner Martin Williams suggested a construction management plan be created to set out how the agency would meet noise standards.
"You [Kāinga Ora] are building next to a hotel that is reliant on a seven-figure contract with a client that says, 'We want that 365 days of the year and it's upstairs, or we're off'. That's a reality of the neighbourhood," he said.
Chateau Marlborough also rehashed its parking concerns at the hearing.
Kāinga Ora said it planned to establish one off-street car park per house, but replace eight on-street parks with a "no-stopping" zone, so tenants had better driveway access.
Its traffic expert said removing the eight car parks would just force town workers to park further down Charles St, which may encourage a switch to sustainable transport.
He said on-street parking was a public asset, not a right.
"I acknowledge that some [tenants] will own more than one vehicle. My understanding, however, is that Kāinga Ora is able to match tenants to the dwelling," he said.
"In addition, residents of these dwellings will know they are provided with a single park and my expectation is that they will manage their transport and car ownership."
Williams said as a solution, Kāinga Ora could put a clause in its tenancy agreement requiring tenants to tell guests not to park in Chateau Marlborough's carpark.
Allan said it was a "very big hammer for a very small nut".
"You'll end up with a tenant who may or may not remember, and a guest who may or may not obey. On its face it's a good idea, but it might end up not happening."
The hearing was adjourned on Thursday afternoon.
Kāinga Ora was due to build 108 new state homes in Marlborough over the next four years, of which 89 would be "public homes" and 19 would be transitional housing.
The council granted it permission to turn five properties on Brewer St into 14 two-bedroom units in September.