Priority One chief executive Andrew Coker said: "It was highlighted by business and building owners on the Strand that they weren't in favour of Waka Maori in the car parks potentially blocking their view."
An alternative proposed option was to build a pier further along the waterfront to house the Waka Maori. Other sites were also ruled out as unviable.
The success of the Gate Pa exhibition, drawing 11,000 visitors in a month, was a catalyst for the waka project with Tuskany brand manager Sally Cooke keen to find the exhibition a permanent home. Although it proved unviable, she believes a case exists for such a centre in Tauranga.
Gary Dawson, chief executive of Bay Leisure and Events, said that though the Waka Maori concept was not viable, the work involved had identified a need for an event centre.
Pukehinahina Charitable Trust project director Buddy Mikaere was disappointed with the decision.
"We need something that is unusual and different to underline the role of Tauranga as a place where you do and see things differently."