A company under tycoon Li Ka-shing's business empire faces resistance from both the government and residents to its plan to convert part of a Hung Hom housing estate into a hotel.
The project by Hunghom Bay Commercial Investments, part of Li's Hutchison Whampoa conglomerate, got the thumbs down from the Planning Department.
The department said it was trying to deter similar applications to mix short-term accommodation with housing.
It also took into account concerns by residents of Hunghom Bay Centre about nuisance that could arise should the three-storey podium shared by blocks G, H and J be turned from offices into an 86-room hotel.
Lo Chun-chung, spokesman for the residents' concern group, said the project would be unfair to flat owners.
"When we bought the flats, we read that the deed of mutual covenant specified the podium was [meant for] offices," he said.
The deed is an agreement among owners covering the use of properties within a building.
The licensing of guest houses in private buildings with residential floors came under the spotlight after a fire broke out at Continental Mansions in North Point on December 29. Residents said the building contained several guest houses that were given licences although they were in breach of the deed.
The 11-block Hunghom Bay Centre, built in the late 1970s, features commercial podiums. The developer is seeking approval from the Town Planning Board, which is due to discuss the application for the hotel on Friday.
The developer argues that the podium is physically distinct from the residential towers above, and the hotel would therefore not cause conflicts between residents and guests.
Residents say shared staircases and possible shared use of an entrance to the inner courtyard of the estate may cause disruption and pose a security risk. They have lodged a complaint with the Legislative Council's public complaints office.
The department says it does not support the application, because of the problems expected to hit the residential floors and the adverse impact on traffic.
The approval of this application "would set an undesirable precedent for similar applications for partial conversion of an existing residential/commercial building for hotel use with shared access with [the] residential portion of the building", it said.
The department raised its objection despite the Tourism Commission's support for the project, which it said would help meet strong demand for hotel rooms.