Some great points raised in the letter. Gyms are often the hub in the wheel these days, most new developments will include gyms, even new office blocks etc, shopping centers and new housing complex's. There is a new developement of housing in Enfield N/E London, where the gym, shops, food outlets etc is in the middle of the 'new' town, I know of a few people who have moved there for this reason. It is a great gym tho, a guy called Mark runs it (who used to be Rhino on Gladiators, you might know him?).
If the council is sensible you should be fine, it would be awful press for them if it got turned down, and the story some how got told to the press with the negatives in BOLD letters
Good luck mate, I hope you can get in and get it started soon!