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Port Nicholson Settlement Trust's hopes of rescuing its investment in a former defense base at Shelly Bay have taken a blow with the Court of Appeal quashing the resource consent.
The court granted Enterprise Mirimar Peninsula's appeal that Wellington City Council misinterpreted the Housing Accords and Special Housing Areas Act 2013 and pushed ahead without properly weighing environmental considerations.
The council must now reconsider the application for resource consent afresh.
The court said it first needs to consider whether it should appoint independent commissioners for the task.
The Wellington Company, which has a joint venture with the settlement trust, wants to develop up to 350 dwellings on the harbourside site as well as boutique hotel, an aged care facility, offices and shops.
The court says by declaring it a special housing area it sought to bypass the Resource Management Act, but it still needed to take into account factors such a the preservation of the natural character of the coastal environment and the protection of historic heritage.
The trust bought the 6 hectare site for $16 million in 2008.
Its then chair, the late Sir Ngatata Love, was counting on Sir Peter Jackson to build a film museum there, but Sir Peter walked away from the project when Sir Ngatata's then partner, the late Karen Skiffington, demanded $750,000 in consultancy fees to help secure the land.
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