The site in Midleton, Co Cork, close to the Owenacurra River, had been designated by the town council for mixed use/town development.
But following an Office of Public Works’ survey in 2009 the site, known as Watersedge, was earmarked a flood risk under an amendment to the Planning and Development Act 2000.
Members of Midleton Town Council are angry Ms O’Sullivan declined invitations to visit the town and further claimed Cork County Council was implicit in badly misinforming her.
The land is within the town boundary and planning permission had been granted in 2009 to Mogeesha Holdings Ltd for a major residential and retail complex, with associated road, bridge and other works. However, the county council, in a draft 2012 town development plan, deemed the site suitable only for open/recreation use.
As a result, the changes impacted on Mogeesha Holdings Ltd despite the company having invested heavily in flood alleviation measures which satisfied the town council.
The town council ignored the county council proposal and opted to retain its “mixed use” zoning in a 2013 Town Development Plan.
But Ms O’Sullivan issued a directive, ordering the council to dezone the land as open space/recreation.
Local councillors, who viewed the Mogeesha proposed development as crucial to the town’s expansion, repeatedly refused to dezone the land.
An outraged mayor, Ted Murphy, said he believed the minister should resign.
He said neither she nor County Hall “know anything about Midleton”.
Cllr Niall O’Neill said outsiders had “not listened but dictated what we should do. Cork County Council is equally culpable as they advised the minister,” he said.