A $200 million to $300m development in Auckland's cultural heart that includes converting the Civic Administration Building into apartments is languishing after two years.

Auckland Council's development arm has been unable to clinch a deal with developer John Love, who was selected in September 2016 for a building project on prime land alongside Aotea Square.

The project includes the conversion of the civic building, a second apartment building, a boutique hotel and a "whare tapere" performance space fronting Aotea Square, which Love said would give a $500m boost to the wider economy.

The buying public obviously understand what council executives do not - that is the Civic Administration Building is just not suitable.

In a statement, Panuku Development Auckland development director Clive Fuhr put the drawn-out negotiations down to challenging times for apartment sales, complex resource consent issues with the Category A heritage Civic building and securing construction contracts.

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He said Panuku and Love's company, Civic Lane Ltd, are addressing the remaining matters that will enable the agreement to become unconditional.

"Both parties are committed to working through these matters as quickly as possible. This does involve several parties, which adds a level of complexity.

"Panuku is willing to extend the agreement while meaningful progress is being made to reach the desired outcome," Fuhr said.

In January this year, Fuhr told the Herald the project was tracking well and Love was close to going unconditional after being given a "slight extension" to a December 2017 deadline.

Other sources at the time said there were still unresolved issues with plans for a replacement facade to meet guidelines on the heritage listed building. Council confirmed Love was in discussions with heritage and building staff regarding potential changes.

The Civic, designed in the mid-1950s and completed in 1966, also contains asbestos that needs removing.

Love did not respond to several messages for comment.

At the launch of the "Civic Quarter" project, he said work was expected to start in mid-2017 and take three years.

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Love said in January this year he was making good progress with pre-sales, but the market had been subject to a number of uncertainties, including the general election and signalled policy changes.

"We have stayed true to our goal of creating quality owner-occupier-focused homes in an area that has so much to offer, but has previously been under appreciated," Love said in January.

Not long afterwards, he ran advertisements saying construction would start in April.

Love is marketing apartments in the "Cab" from $650,000 and has just announced on the project website that a construction contract has been signed with Naylor Love. No date is given for work to start.

Love's Tawera Group was selected from three shortlisted companies to restore the civic building and develop 5000sq m of surrounding land. The other shortlisted companies were Willis Bond & Co and Rebel Property Group.

Waitemata councillor and heritage advisory panel chairman Mike Lee said it had been a ramshackle deal from the beginning.

"The buying public obviously understand what council executives do not - that is the Civic Administration Building is just not suitable for apartments.

"The cost to the ratepayers of leaving 18 floors of prime office space in the civic heart of Auckland empty for four years must be enormous," Lee said.