A group of Cooks Hill residents says the size and design of a proposed six-level building in Darby Street are out of character with the area.
Sydney businessman John Markovic lodged plans a year ago for a site opposite Newcastle Art Gallery after buying the land for $6.85 million in 2017.
The $20 million project includes 30 serviced apartments on the corner of Darby and Queen streets and 24 units in a separate building fronting Queen Street.
The redevelopment would replace the former Roads and Traffic Authority building at 59 Darby Street.
The larger building features a distinctive webbed facade enclosing a ground-floor public space, a bar or restaurant and a roof-top communal area.
But it is also 5.4 metres taller than the site's 14-metre height limit, a 38 per cent variance which has concerned residents, including those in the neighbouring Regency Park gated community.
The project attracted 27 objections after being place on public exhibition.
The council routinely grants 10 per cent variations on height limits, but a staff report tabled to a council public voice session on Tuesday night said its Urban Design Consultative Group had asked the developer to address the height exceedance.
Regency Park resident Allan McKinnon told councillors that neighbours feared the development would cause overshadowing, affect their privacy, block views and increase antisocial behaviour and night-time noise.
Mr McKinnon said the developer was trying to maximise the economic viability of the project, but there was no community benefit in the proposed height variance.
"The size of the proposed building is not seen by local residents as being complementary or in character with the surrounding landscape," he said.
Mr Markovic told the meeting he wanted to create a "landmark" and an "intellectual haven" on the building's open ground floor.
"I believe this project will invigorate the street and bring a lot of talk around town," he said.
Planning consultant Patrick Quinlan, of KDC, said the proposal was a high-quality building at the entrance to the city centre and the architects had sought to minimise the height impacts in the design.
The public voice session will inform a report to councillors before they decide whether to approve the project.
