Sydney Ritz-Carlton proposal rejected

NSW planning minister Rob Stokes wants Pyrmont developed after a 66-storey hotel plan was rejected

Plans for a 66-storey five-star hotel in Sydney's Pyrmont have been rejected for a second time, this time by the NSW Independent Planning Commission.

But the state government says the "door's not closed" on a new hotel and apartment tower in the inner city suburb, which it hopes will be Sydney's "next entertainment and innovation hub".

The commission on Wednesday afternoon found the benefits of The Star's 237-metre Ritz-Carlton tower construction did not outweigh the impacts, as it would prove "overly obtrusive" and was inconsistent with NSW planning principles.

The commission said that the new tower would be "inconsistent with its immediate context" and "result in unacceptable visual impacts due to its scale, isolation and visual dominance of the existing Pyrmont character".

The application was referred to the IPC after the state's planning department rejected the Star's multi-million dollar plan for the hotel in July.

The referral came on the heels of objections from the City of Sydney Council and the local community.

City of Sydney Lord Mayor Clover Moore welcomed the IPC's decision on Wednesday, saying it was a "win for the community and the integrity of the planning system".

"Approving this development would have required the most significant departure from planning controls in NSW history ... by standing up to a disingenuous campaign from The Star and its allies in the media, the IPC has reinforced the principle that planning rules should be applied fairly to all," she said in a statement.

"The casino proposed a tower eight times the height allowed by the planning controls, which would have included 35 storeys of luxury residential apartments on a site zoned for commercial activity as well as overshadowing public spaces and parkland."

A spokesperson for The Star said the company was still "digesting" the decision, having had no prior notification it was set to be announced.

"We just hope this does not prove to be a lost opportunity for Sydney," the spokesperson said in a statement.

"We want to spend more than $500 million on helping NSW drive tourism. This development would create around 1000 jobs, provide opportunities for suppliers and deliver significant other economic benefits."

However, NSW Planning Minister Rob Stokes said the "door was not closed" to a new hotel and apartment tower in Pyrmont.

The government had previously expressed its interest in amending planning controls around Pyrmont to transform the precinct into a transport and jobs hub.

"We're working on a bold new masterplan for Pyrmont that will allow it to be the city's next entertainment and innovation hub," Mr Stokes said in a statement.

"We're keen for the Star to collaborate on this work to ensure any new development is delivered as part of a strategic plan for a revitalised peninsula."