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NEWPORT BEACH

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Operators of the Newport Dunes resort are questioning whether a proposed hotel is still worth pursuing, given the restrictions slapped on them last week. City planning commissioners told the developer to eliminate the hotel’s fifth floor and remove a third floor from a proposed time-share building that would face the Dunes marina.

But the deal-breaker may be the request to reduce the amount of conference space--deemed critical to attract business groups--from 54,000 to 30,000 square feet, a 44% cut. Project manager Tim Quinn said that reducing that space “cuts the heart out of the project.”

The Dunes expansion, which would be built in a corner of the Upper Newport Bay, has sparked controversy with upset neighbors, who worry about traffic and noise, and with environmentalists, who fear the project’s size and scope.

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Quinn said Dunes operators will make a decision to cut the conference space and move on, or withdraw the project altogether by the end of the week.

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