Though the proposal to build three Frank Gehry-designed condo towers on King Street West near John Street remains alive, the project as designed has hit a new roadblock.

The plan backed by theatre mogul David Mirvish calls for the demolition of The Princess of Wales Theatre along with four heritage buildings to make room for three condo towers, each more than 80 storeys in height.

Citing size and density concerns, the city's planning department has rejected the original proposal, a decision the developer has appealed to the Ontario Municipal Board (OMB).

A motion introduced by Coun. Adam Vaughan on Wednesday calls for a working group to be struck to examine the project in greater detail. Vaughan said the intention is to find a compromise that will see three Frank Gehry-designed buildings come to the Entertainment District but not of the size and scale proposed.

"The challenge we have now is getting people around the table," said Vaughan Thursday on CBC Radio's Metro Morning. "Instead of having folks scream 'no' from one side of the room and 'yes' from the other side, find a way forward that protects the integrity of the artistry on site and at the same time, doesn't deliver a set of precedents to the OMB that they bulldoze every neighbourhood in the city."

Vaughan said the height of the towers proposed "is an issue," sentiments echoed by city planner Jennifer Keesmaat on Metro Morning earlier this week.

Members of the working group examining the project have not yet been named.

Vaughan said components of the plan – such an art gallery showcasing Mirvish's collection and a classroom space for OCAD University – would be a great addition to King West.

"It's an extraordinarily complex proposal but it's also one that has extraordinary opportunities attached to it and we're trying to reconcile those things," he said.