The club plans to demolish two buildings on the corner of Cameron Avenue and Chandler Street in Belconnen, and replace them with a 12-storey building.

It is unclear what lease variation tax the club will have to pay. The tax is calculated on the difference between the value of land before a development and after a development, but a valuation from Colliers says the land will be worth just $5000 more after the hotel is built, at $535,000. That would attract a minimal tax of less than $4000.

The Labor Club, which is controlled by the ACT Labor Party, plans to have restaurant and shopping space on the ground floor, with four levels of carparking above that, and five levels of hotel space above the carparks, with 90 units. The top two levels will be office space and in the basement, the club plans a gym and conference room.

The government's strategic planning section raised concerns about the design, saying it was unclear why the gym and conference facilities were in the basement, when they would have far greater appeal at an upper level. It was also unclear why parking occupied the four levels above the ground floor instead of the basement levels.

Strategic planning also raised "significant concerns" with the height and appearance of the carparking floors. Including the ground floor, the carparking took up 23 metres, which was almost half the building height. That would have a significant visual impact on the area and looked excessive and inefficient, the section said. The heights of the carpark floors, at 5.47 metres, appeared "very inefficient", with just 3 metres for the hotel rooms above. The section suggested reduced heights for the carpark floors, and the inclusion of basement carparking.

It also asked for better screening of the carparking floors, saying it was concerned the current plan was too dominant. The proposed metal louvres and powder-coated screens were repetitive and emphasised the building as a car park instead of a hotel.

"The current carpark proposal is not considered a high quality outcome and is not supported," Strategic Planning said. In response, the Labor Club has agreed to redesign the facade of the carpark to minimise its impact, and will provide new architects' drawings. Concerns about the basement gym and conference room, and the height of the carpark floors, though, do not appear to have been addressed.

The planning directorate has approved the development, subject to the changed facade, an investigation of whether the site has any old underground fuel storage and some other more minor conditions.

The club says the hotel could be used by friends and family visiting students at the University of Canberra and by short-term students.

The site ties in closely with University of Canberra, which converted the historic Cameron Offices, diagonally across the road, into Weedon Lodge, for student accommodation. The site that was home to the other Cameron Office blocks directly across the road from the Labor Club is owned by Amalgamated Property and is largely surface carparking. On a car park directly behind the club, Geocon plans a major development with up to 745 apartments.