Tauranga mayor Tenby Powell has apologised after the username "hastalavista2" was used for a Trade Me listing for the Bella Vista properties.
The council posted the listing today after it announced it was putting the 22 properties in the Bella Vista subdivision on the open market.
The failed subdivision has been a sore point in Tauranga since the council evacuated 21 properties in March 2018 over fears they were in danger from an incoming storm.
Months of pain followed for both the homeowners and the council, with the council finally buying the affected properties in November 2018 for $14 million.
The subdivision has sparked multiple reports critical of the council's actions and the council has taken the now liquidated developer, Bella Vista Homes, to court in a case due to be heard next year.
The council has been working to remediate the subdivision - demolishing and removing several houses - before putting it on the market.
The council's Trade Me listing was initially posted today by an advertiser named "hastalavista2", an account created last month.
"Hasta la vista" is a Spanish phrase meaning "see you later".
"Hasta la vista, baby" is a famous catchphrase used by Arnold Schwarzenegger's character in the action movie Terminator 2.
The advertiser name has since been changed to "lakesboulevard2".
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Asked about the gaffe, Powell said he was "very upset" about the "deeply embarrassing" incident, for which the council had received at least one complaint.
"I don't know what to say. It's a staffer who, I think, has completely misunderstood the sensitivity of this issue. It has been referred to the chief executive and we will handle it on Monday.
"In the meantime, I just want to apologise to any of the Bella Vista homeowners and anybody that's had anything to do with this for the lack of sensitivity shown by this person.
"This is not who we are."