A developer is planning a motel on a Kerikeri site where he co-owned a business that is now in liquidation owing nearly $1.3 million.

Udo Lammerting, a commercial real estate developer from Germany, is seeking consent to build a motel with 12 one-bed and four two-bed units, making a maximum capacity of 40 guests, on a site he owns near Kerikeri Airport.

The motel, which according to council documents will be called Palmco Motel, is being developed by LIG Lammerting Investment Group (NZ) Limited on land owned by the Cologne developer. An existing cafe/restaurant building on the site will be retained.

The land was previously home to Palmco Garden, a palm nursery, which Mr Lammerting owned with his wife Kristin and son Alexander, through a different company - LIG Lammerting Business Investment Group (NZ) Limited.

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That business went into liquidation in 2014 leaving debts of more than $1.5 million. Since then the amount owed has been reduced to $1,289,370, according to the most recent creditors' report.

Some creditors are unimpressed with Mr Lammerting's motel project, saying it is a "slap in the face" for those owned money by the plant nursery venture.

Mr Lammerting initially proposed building a 120-guest motel - a major boost to Kerikeri's current total of 600 guest beds - but the Far North District Council raised concerns about its size and effect on the area's rural character.

The council indicated it was unlikely to grant consent because of the scale of the development and to ''maintain the integrity of the Rural Production Zone''. New planning rules in the Far North aim to preserve the character of rural areas and reduce the amount of horticultural land lost to urban development.

Mr Lammerting said the Wiroa Rd site, with an existing restaurant, award-winning gardens and proximity to Kerikeri airport, was perfect for a hotel targeting the wedding and conference markets.

Creditors spoken to by the Advocate would not be named, saying they didn't want to jeopardise their chances of getting their money back.

A former Kerikeri man said the money he lost in the liquidation, about $40,000, forced him to shut his subcontracting firm and work for someone else. The motel development on the same site was ''just another slap in the face'', he said.

However, Mr Lammerting said he had put millions of dollars into the local economy, but the plant nursery business was ''like a black hole'' always in need of more capital. In particular an expansion into Whangarei and Auckland led to heavy losses.

After capital injections totalling about $5 million, the shareholders decided to stop putting in money and placed the business into liquidation, he said.

Mr Lammerting said the land on which the motel was planned was separately owned and ''nothing to do with the [Palmco] trading company''.

Earthworks already carried out the site are covered by an existing consent. A regional council consent has already been granted for the motel's sewage system.

As of July last year, according to the most recent liquidator's report, the amount still owed by LIG Lammerting Business Investment Group was $1,289,370 to 64 creditors, including suppliers, employees, contractors and IRD. Thirty creditors are in Northland, mostly in Kerikeri, Waipapa and Whangarei, and the remaining 34 concentrated in Auckland and Wellington.

The liquidation has yet to be completed. In a report filed with the Companies Office, liquidator Steven Bennett said that was because a preferential creditor was undertaking an independent investigation. Once that was complete creditors would be called to a meeting to discuss further avenues for recovering their money.