Mr McKay, who has promised a new culture at the Super City, had a blunt message for the planning department on heritage matters.
"The leaders and managers in the planning department ... have to be mindful of the context in which we are operating. Our community in Auckland is clearly moving to more protection and more care and more concern for our built heritage. And I believe that is where this council is going," he said.
Mr McKay said the recommendations in the report would improve the process in future.
Among the recommendations are ensuring contentious applications are "escalated" to senior management and local boards being briefed early on and having the opportunity to contribute to the planner's final report and recommendations.
People who want to demolish or remove a pre-1940 building in the Residential 1 or 2 zones will also be encouraged to provide information on the replacement building at the application stage to take into account future impacts, and alarm bells will ring when heritage staff and planners disagree.
Mr Dales was given the file on November 16 or November 17 and recommended approval of the application on December 5.
He was the planner who approved the demolition of three Spanish Mission-style houses in St Heliers last year.
An internal review of the council's heritage advice by council principal heritage adviser George Farrant said the cottage could be restored at reasonable cost and moved to the front of the section to allow a new house to be built behind it.
Mr Farrant said this would offer a balanced and equitable solution to the conflict between historic character preservation and reasonable use of the 685sq m site, which has panoramic views of the city skyline.
Herne Bay businesswoman Wynnis Armour, who paid $2 million for the property in November 2010, could not be reached for comment about her plans, although last week kauri floorboards and other materials from the cottage were offered for sale on Trade Me.
Councillor Sandra Coney, who chairs the council's heritage forum and heritage advisory panel, said the council had said it was going to improve its performance on heritage but the changes were not happening fast enough for the buildings.