Senior Auckland City Council officers advised councillors that a waterfront site was the best setting for a national stadium that would give benefits long after the World Rugby Cup 2011.
In their assessment, a waterfront site scored over a redeveloped Eden Park on urban design, transport and future use potential.
It was also in line with the council's vision and plans for future development of the city.
But the officers said significant improvements were needed to the design proposal to achieve the quality of "world class architecture" required.
The scale and bulk of the stadium straddling Marsden and Captain Cook Wharves would create a visual and physical barrier between the harbour and to the fine-grained character of neighbourhood heritage buildings.
Moving the site east to between Marsden Wharf and Tinsley St on Bledisloe Wharf would balance the stadium bulk by industrial port and large-scale buildings.
However, the Auckland Regional Council was concerned that revenue from the port would be affected by this move, and Rugby World Cup Minister Trevor Mallard preferred a site on Captain Cook and Marsden Wharves.
A cost-benefit analysis supplied lamented the lack of a careful analysis of waterfront land-use options which was crucial to weighing up the waterfront option.
It noted neither the waterfront nor the Eden Park projects had a fixed construction price at this stage, so there was a risk of cost increases.
"These information shortfalls expose councils to the risk of making a poor choice and paying more than is required," said the analysts' report.
The officers said the Eden Park building design was well advanced and generally suitable from an urban design view.
Its benefits included appropriate architecture, operational space around the stadium, and it was the historical home of rugby.
Preference for a waterfront site was conditional on the council bringing forward completion of the Grafton Gully Stage 3 so that Quay St could be turned into a boulevard-style road sooner.
The council must also buy and develop Queens Wharf as public space and build Te Wero bridge to link the marine events area and the Viaduct.
The officers said a waterfront site offering passenger transport serving the CBD could handle 28,000 people an hour. Eden Park would need an upgraded station and special arrangements to shift 18,000 people to and from the CBD.
A waterfront site would build on investment in public transport initiatives linking with and serving the CBD, and construction of an inner-city rail loop which would need electrification.
Quay St would need to be closed during events between Tangihau St and Lower Hobson St.
A waterfront site offered the greatest potential economic benefit at $540 million compared with $535 for Eden Park. The waterfront's earnings included $60 million from concerts.
The report's authors were general manager arts, community and recreation Jill McPherson, general manager city development John Duthie, general manager finance Andrew McKenzie, and general manager transport Stephen Rainbow.