The rezoning could have netted millions for the Gleneagle Hotel Group, for which councillors, Patrick O’Donoghue (FF) and Sheila Casey (FG) both work.
But it has yet to be finalised because council management, who opposed the rezoning of the 20-acre site on the periphery of Killarney town, refused to pass it.
The Standards in Public Office Commission (SIPO) has confirmed it will hold a public inquiry into the two councillors’ conduct in March.
A commission officer carried out a preliminary inquiry in recent months and his report was deemed sufficiently strong to warrant the formal investigation. It is understood the report found there was “prima facie evidence” to sustain the complaint against the councillors.
The hearing on March 26 will be the first time the commission has probed the conduct of local authority members.
Mr O’Donoghue is managing director of the Gleneagle group and Ms Casey, the town mayor, is also an employee.
Last March, the council voted in favour of rezoning the Gleneagle Hotel property, which includes the four-star Brehon Hotel, the National Events Centre, four apartment blocks and a pitch-and-putt course.
Under the rezoning proposals, the site would have been transformed from its “unformulated” status to one which allows tourism and associated town-centre facilities. The value of the site would have soared if the rezoning had gone ahead.
Mr O’Donoghue did not vote on the rezoning motion, but sought the support of other councillors on the issue. Ms Casey voted for the rezoning.
Last September, after a complaint by the Ethics Registrar of Kerry County Council, a preliminary inquiry was initiated by SIPO to establish whether the two councillors had breached ethics.
Yesterday, Independent councillor, Michael Gleeson, who voted against the motion, said he and other town councillors had been asked by SIPO months ago to recollect the events surrounding the rezoning motion. He was also asked to state if he had been approached by either or both of the councillors.
If the complaint against the pair is upheld by SIPO next month, the commission — which cannot impose sanctions — will most likely send a report to the local authority. It may also send the report to the relevant minister and gardai.
Efforts to contact Mr O’Donoghue, Ms Casey and the Killarney town council proved unsuccessful last night.