Upgrades of the Cargo Shed will not be continued due to results of a geotechnical assessment, undertaken to inform the planned internal upgrades.
In a written statement, the Tauranga City Council said the results of the geotechnical assessment were in relation to the susceptibility of the property during earthquakes.
The Cargo Shed would require extensive foundation improvements to stabilise the property and reduce the risk during a seismic event, the council said.
"Significant structural improvement is also required to bring the Cargo Shed up to today's standards."
"Due to the cost involved with upgrading to meet these standards, the council will not continue with the upgrades and the Cargo Shed will not be available for bookings."
The council said the future of the Dive Crescent area was yet to be determined and the council and the Otamataha Trust must first acquire the legal land title from the Crown.
"Once the legal title has been transferred to the council and the Trust, the future of the area can be fully explored, including undertaking necessary and appropriate improvements."