A $7 million plan to establish a marine precinct at Sulphur Point has been blocked by Tauranga City Council.

Councillors yesterday voted 5-4 against giving agreement in principle to buy a 300-tonne travel lift and establishing a boat maintenance yard on land next to the Harbour Bridge.

One of the options set out in a report from council chief executive Ken Paterson and property manager Anthony Averill was to prepare a project plan and business case for the first stage of the marine precinct.

If the business case and geo-technical report had stacked up, the council's $3 million share of the project would have been funded from the sale of council-owned properties. The Bay of Plenty Regional Council would have been asked for a $3 million to $4 million contribution from its regional infrastructure fund.

 Sulphur Point Marine Precinct concept plan - Supplied

Sulphur Point Marine Precinct concept plan - Supplied

But only Tony Christiansen, Bill Faulkner, Larry Baldock and David Stewart supported the plan. Mayor Stuart Crosby and Councillor Terry Molloy could have swayed the vote in favour of preparing a business case, but had earlier left the meeting because of other commitments.

Councillor Wayne Moultrie argued that selling property to help fund the project could leave the council open to criticism of misleading ratepayers. It had said the proceeds would be used to reduce debt.

Councillor Murray Guy said he really struggled with the proposal because they were talking about a "loss-making activity" at a time when the marine industries market was dependent on the state of the economy.

Councillor Rick Curach said he did not think the net benefit would justify the investment. "I can't commit ratepayers to this expenditure." Also opposing were Councillors Catherine Stewart and Bill Grainger.

Key features of the project included multi-use wharf facilities, a new sea wall and berthage, sand blasting facilities, workshop space and public access to parts of the site.

Councillor Faulkner led the debate in favour of preparing a business case, saying there had been a significant lessening of the industry since the 600-tonne slipway closed. If something was not done, Tauranga would lose all the trades that serviced this sector of the market, he said.

Boats up to 35 tonnes were handled at the two marinas but, with the small slipway at Sulphur Point nearing the end of its useful life, business could be lost permanently to Nelson, Auckland and Whangarei.

Councillor Faulkner said the plan covered basic infrastructure, which the industry could not afford.

Mr Paterson said a 300-tonne travel lift would complement Auckland's plans for travel lifts and not be in competition. It would take up a lot of the local demand until the precinct had gained an international reputation.

The report said the council would not get a financial return from the land occupied by the hard stand for "a period of time".

It argued that the council had a "significant interest" in ensuring the growth of Tauranga's gross domestic product. "With council taking an initial lead role, the project had certainty and security."

Councillor Catherine Stewart said that, if private enterprise could not do it, why should the council do something that may not have a cashback for ratepayers.