The future of the MedPark site opposite Tauranga Hospital has again been thrown into doubt after a developer pulled out of a conditional contract to start work on the project.
Redline Holdings made an offer to buy the 6483 sq m land on Cameron Rd between 18th and 19th avenues but decided not to push ahead because of lack of tenancy interest.
The site was earmarked for a medical precinct housing specialists and consulting rooms. Under the resource consent, the three-level building would have 6700 sq m of space and underground parking for 238 cars.
"We tried very hard to fill the tenancies. We had some people interested but it wasn't enough," said Terry Scott, managing director of Redline Holdings.
Redline ran full-page newspaper advertisements about the project and Bayleys worked its data base to attract interest.
"There is a very small nucleus of people to deal with, and unfortunately there's not enough of them," said Mr Scott.
"I think one of the problems is that doctors own their own premises and they don't want to move."
Redline actually looked at using the site for a motel.
"It's a good location because of the hospital but a motel would be too expensive - it didn't stack up," Mr Scott said.
He said Redline had signed one conditional lease with urologist Peter Gilling and surgeon Harvey Kumar for 200 sq m.
"It's a great site for anyone with hospital commitments - I could walk (across the street) from one part of my life to the other," said Dr Gilling, who is also head of the Bay of Plenty Clinical School.
Dr Gilling and his Tauranga Urology Research team has now committed to staying at Promed House in 10th Ave by signing a new three-year lease.
"I'm picking it will be three years before anything really happens there when the market picks up," he said.
With Redline pulling out, ownership of the MedPark site is still in the hands of Avenue Property Developments.
Its directors are Rotorua-based Dennis Walsh and Neil Hamilton, a former Tauranga real estate agent who spent nearly a decade buying the land on 10 titles, removing the 11 state houses and two others, and getting planning approval for the medical building.
Mr Hamilton is now overseas working for First National Real Estate in Vanuatu.
A spokesman for Avenue Property Developments said another prospective buyer was showing interest. "We are working with someone local.
"But it's all in a state of flux and over the next few weeks we'll know," he said.
The spokesman said the project had tenants lined up but over the past three to four years there has been a huge (economic) climate change. In the end, the object was to de-risk the project by doing a staged development."
He confirmed that the site may go to mortgagee sale - "it's a fairly delicate situation".