The Town Planning Board yesterday voted down a proposal by Lo Yuk-sai's Paliburg Holdings to build an 899-room three-star hotel on top of its Kowloon City Plaza. The board considered the $300 to $350 million plan to be incompatible with the surrounding environment. A board spokesman said: 'The proposed 39-storey hotel is not compatible to surrounding characteristics of shorter buildings.' Even though the neighbouring residential buildings were being redeveloped, they would not be as tall as 39 storeys since they could be built based on a plot ratio of only nine, rather than 12 proposed for Kowloon City Plaza, he said. Paliburg applied to use the seven-storey plaza's western portion, affecting cinema, retail shops and a roof-top car-park to make way for the proposed 263,000 square feet hotel tower. The plan also included a 186,000 sq ft two-storey property on top of Kowloon City Plaza's eastern portion, for 500 car-park spaces. The project would have increased Kowloon City Plaza's total floor area from 630,000 sq ft to 765,000 sq ft. The board was also concerned about the traffic impact of the project. The board's decision is a major obstacle to Mr Lo's ambitious plan to resume investment in Hong Kong after Paliburg met financial problems triggered by the Asian crisis. The Kowloon City Plaza hotel project was revealed by Mr Lo in September when Paliburg's hotel arm Regal Hotels International Holdings agreed to sell 29 North American hotel interests, wholly or partly, to Millennium & Copthorne Hotels for US$725 million. At the time, Mr Lo had said Paliburg could invite Regal to invest jointly in the hotel project. The board yesterday approved Kerry Properties' revised plan for its Tuen Mun Ho Fuk Tong redevelopment. PROPERTY