THE Launceston City Council is so sensitive to a proposed redevelopment of the old grain silos in Invermay, it is ``loath'' to discuss planning or commercial issues relating to the area.
Last week Launceston entrepreneur Errol Stewart proposed a 64-room hotel in the silos, which stand on the ``wet'' side of the city's flood levees in Lindsay Street.
The complex development raises zoning issues particularly around flooding, and rezoning by the Tasmanian Planning Commission would be needed for it to proceed.
Mr Stewart is confident zoning obstacles can be solved especially with community support for the multimillion-dollar project.
The silos are within the Invermay Inveresk Flood Inundation area, which was born out of a 2008 agreement between the council and the state government.
In return for $13 million in funding for the Launceston flood levees, the council agreed to limit development at Invermay and Inveresk.
In 2008, the council attempted to ease the development restrictions but backed down after the government threatened to pull the funding.
The new Launceston planning scheme prohibits residential-style development around the silos although an exception has been made for a nearby student housing proposal.
Mr Stewart hopes a 150-metre oval-shaped flood wall protecting the proposed hotel would allay fears about the flood risk.
He plans to ask that the land be rezoned to urban mixed use which would permit hotel developments.
The council would also not discuss selling the silos and surrounding land, which it had to acquire for the flood levees, to Mr Stewart, although the legislation first requires it be offered to the previous owner.
``There will clearly be a significant process ahead, but I am loathe to get into too many specifics on the potential development of the silos, at this point,'' council general manager Robert Dobrzynski said.
This was because aldermen were yet to ``consider the matter informally or formally'' although they had been briefed by Mr Stewart.