NG Regulator Placement for Fireplace

I am installing a new gas fireplace into a basement. I have a pounds to inches regulator that is in a mechanical closet that is about 30ft away. I was having trouble getting the proper pressure output at the fireplace and Maxitrol is telling me the regulator has to be ~3ft away from the appliance. City inspector tells me I cant put the regulator in the fireplace chase/surround because it has a vent limiter on it. Any ideas on how or where I should place the regulator for this thing?

Service is a 2psi line and the fireplace needs 5-10in-wc entering the manifold.

Thanks for any help!