An armed police officer was standing at the police cordon at the entrance of Wilrose Place turning people away when the Bay of Plenty Times arrived at the scene about 3.50pm.
Several armed uniformed police searched around business premises inside the cordon.
That included looking inside and underneath skip bins, recycling containers, cars and also over a boundary fence down towards a water-filled culvert.
Staff at one local business inside the cordon, who asked not to be named, said they saw the AOS members arrive and these officers spent quite some time at the scene.
The AOS were then replaced by uniformed officers who were going door to door speaking to tenants about what they saw and may have heard, one staff member said.
One man said he had been asked by a police officer whether he had a heard a shot but confirmed he had not, although he was busy working inside his workshop.
The search resulted in significant disruption as they had been told to remain inside, and arriving customers had to be served via the back door or turned away, the man said.
Another man who worked nearby said this was not the first time the area had been searched by police, but he was stunned by how many armed officers turned up yesterday.