A prime harbourside property in Chapel St leased to Mobil for a service station could end up being owned by Judea-based Maori hapu Ngai Tamarawaho.

Tauranga City Council has disclosed details of negotiations with the sub tribe in response to an Official Information Act request from retired Mount Maunganui lawyer Rob Paterson.

The possible deal awaits the council signing off on a policy to deal with Maori iwi and hapu groups who want to buy surplus council-owned land.

Tangata whenua are seeking rights of first refusal on the surplus land, including the service station in Chapel St. The review of the council's current policy was triggered by another hapu seeking ownership of the reserve at the base of Mauao holding the Mount Hot Pools, the Beachside Holiday Park and the Mount Surf Life Saving Club's pavilion.

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Ngai Tamarawaho have been in discussions with the Crown for 10 years to settle their Treaty claims in this location.

Council chief executive's group general manager Kirsty Downey said the legal status of the land meant the Minister of Conservation had to first approve the sale.

''This matter has been put to DOC for its approval and we await DOC's report. We require this report before we can progress discussions with Ngai Tamarawaho or take the matter forward to the council.''

She said the lease to Mobil Oil expired in 2022 and a sale prior to this required Mobil's approval. The council also needed to establish whether there were any requirements to offer the land back to descendants of the original owners.

''The council is in the process of determining its obligations under the Public Works Act.''

The newly-elected council has been handed the task of making a decision on the draft ''Recognition of Tangata Whenua Interests and Aspirations Policy''.

The former council twice opted to let the matter lie on the table, the first time in order to seek a ''clear and succinct statement from tangata whenua on their interests and aspirations'', and the second time to allow a hui between councillors and Ngai Tamarawaho.

''Council is considering matters raised at this hui, including right of first refusal,'' Ms Downey said. Neither the current policy nor the draft policy included giving tangata whenua first rights of refusal.

Part of the information released to Mr Paterson included a 2015 report from Buddy Mikaere of Ngati Tamarawaho. He said two properties in Dive Crescent and The Strand extension were removed from the Crown-owned landbank of properties for Treaty settlements because they were required by the council for Harbour Bridge and pipeline projects.

He said that as a result of complaints by the hapu, the council promised to find an alternative piece of land in the CBD/Waikareao area. ''In 2012, the council advised it had found such a property at 60 Chapel St, which is the site of a Mobil service station.''

Mr Mikaere said Ngai Tamarawaho had been treated shabbily in respect of 80 Dive Crescent and the Strand Extension properties, saying the failure to properly consult had been particularly offensive.

He said these matters needed to be factored in to the purchase price for 60 Chapel St, through a discounted price of $1 million. Payment would be made through the current lease of $150,000 a year for 6.6 years, with the council meeting legal costs.

Mr Paterson urged the council to stick to its draft policy or the ''completely acceptable'' current policy, saying the right of first refusal was not relevant.

Council-owned Mobil site in Chapel St
Land area: 3300 sq m
Assessed land value 2015-16: $1.34 million
Assessed improvements 2015-16: $610,000