The prospect of a second Greenmeadows supermarket, directly opposite the existing one on Gloucester St has been scrapped after the New World owner blocked the development by buying land in the middle of it.
Colliers International director Simon Tremain said the commercial real estate company attempted to gather smaller sites into a larger block "for a potential opportunity".
Nichol Glass & Aluminium director Richard Nichol said several landowners agreed to only sell their land to any buyer collectively.
"We had an agreement with all of our neighbours to stick together because we knew that all four properties were for sale," he said.
"We had a signed sale for a very nice price."
Party to the agreement was Eric McDougall, who said his family trust decided to accept an offer made by the New World owner instead.
Because Mr McDougall's land is in the middle of the proposed development, it will not proceed.
His fully-leased property was on the market for two-and-a-half years, he said.
"Nobody has been interested until now."
Because there were many years to run on tenants' leases and a cellphone tower on his property, he said he doubted the development could have taken place.
"Once the tower is in place it has to stay there for the whole Hawke's Bay complex."
He said he explained his situation to his neighbours and they were "all good" about his decision to sell.
A property commentator said the phone tower on Mr McDougall's land could possibly remain in a car park or a deal struck for it to be replaced on another site.
Greenmeadows Panel & Paint owner Tony Carson said he was very disappointed his business had lost the opportunity.
"It's a shame it didn't happen - it came to an abrupt stop," he said.
New World owner-operator Iain Beaton would not comment on why the land purchase was made, saying land was also owned in Taradale.
"It's where we operate and I have no comment on our purposes for that site," he said.
Napier City councillor Graeme Taylor said he would prefer to see a new supermarket in nearby Taradale.
"Mr Beaton did have a supermarket there and he has moved it," he said.
"That has been one of things that has been detrimental to the Taradale CBD."
The Taradale New World closed when the Greenmeadows branch opened.
It was built after a similar campaign to aggregate land succeeded 15 years ago.
New World owner Foodstuffs paid $2.985 million for 13 sites on 1.13ha.
Property analyst Pat Turley said "a stiff price premium" would have again be payable to transform several titles into one development, because of the costs of buying out leases and demolition.