SkyCity has abandoned plans to take a slab of airspace over Federal St to expand its existing convention centre.
For the past two years, the casino company has faced a rocky ride to build over a quarter of the block in exchange for paying $10 million to upgrade the tatty block at street level.
It is understood the street will still be upgraded under a new agreement whereby the casino company will pay $4.5 million and the council $5.5 million.
Auckland councillors discussed the issue behind closed doors on Monday. A council source said the council and the company were close to signing an agreement significantly different from the original proposal.
The proposal is separate to negotiations between SkyCity and the Government to build a $350 million international convention centre in Hobson St in exchange for more gaming machines and an extension to its licence.
Reports suggest the Government may allow SkyCity to operate up to 500 more machines, which the Problem Gambling Foundation fears will drive an upsurge in gambling addiction.
SkyCity has wanted to expand its existing conference centre in Federal St from 1500 to 2000 seated guests and 1200 to 1600 guests for dining, but a source suggested it had pulled back in light of the $350 million convention centre in Hobson St.
Plans to build over 48m of Federal St - a quarter of the block between Wellesley and Victoria Sts - and wrapping the overbuilding in an artwork were widely criticised.
The former Auckland City Council urban design panel and advisory panel for public art were fundamentally opposed and last year the proposal was knocked back by the Waitemata Local Board. Last night, Waitemata board chairman Shale Chambers said he was pleased the overbuild was not proceeding and welcomed the likely upgrade of Federal St.
In 2010, SkyCity chief executive Nigel Morris said the company was aiming to achieve something that was visually attractive, overwhelmingly positive for the city and would help make SkyCity more of an attractive international destination.
The company did not respond to the latest proposal yesterday.
* SkyCity has dropped plans to take a slab of airspace over Federal St.
* $10 million upgrade of Federal St still proceeding.
* SkyCity to contribute $5.5m and Auckland Council $4.5m.
* Changes linked to $350m Hobson St convention centre.