Alceon, which operates the centre, lodged a height variation application for Myer's current Anson Street frontage from the current limit of 12 metres to up to 20 metres, allowing up to five storeys.

Orange City Council's heritage advisor's report linked the development with Quest Apartment Hotels, however Quest and Alceon have declined to confirm and no formal agreement has been struck.

At Tuesday night's council meeting, councillors allowed the planning proposal to move to the NSW Department of Planning and Environment for consideration.

While not opposed to the development, councillor Neil Jones asked for the planning proposal to be deferred for a briefing session due to concerns about parking and heritage.

According to the proposal, the apartments would require 83 spaces, but Orange City Centre's basement car park would be 26 spaces short, meaning spaces in the Ophir car park would have to be leased.

“Does that mean 83 parking spaces that will be allocated to guests of the hotel and not available to anyone else?” Cr Jones said.

“I would like a full explanation of the implications.”

However, fellow councillor Russell Turner argued the application was only to vary the allowed height and design concerns could be discussed at the development application (DA) stage.

The department will assess the proposal before a DA can be lodged.

Alceon has another DA pending to transform the remaining Myer space into specialty food and retail shops and a Harris Scarfe.