Taranaki Whānui leaders say they sold three parcels of land at Shelly Bay to fund a development in Eastbourne.
The Port Nicholson Block Settlement Trust (PNBST) has distributed a special issue newsletter to iwi members "primarily as the Trust's response to the recent media coverage concerning Shelly Bay".
Meanwhile, developer Ian Cassels has penned a letter to Wellington city councillors over the weekend offering to meet with them after a "challenging" past month for the project.
A proposal to develop Shelly Bay, which includes 300 new homes, has already been through two court cases and continues to be the subject of controversy.
It's alleged that when PNBST failed to get the necessary 75 per cent support from iwi to sell land at Shelly Bay, parcels were sold separately to a company owned by Ian Cassels so the deal was not classified as a "major transaction", meaning it didn't need to be voted on.
A group within Taranaki Whānui, called Mau Whenua, intends to take those allegations to court and has formed an incorporated society as a vehicle to do so.
The newsletter, dated May 3, said PNBST was short of money by the end of 2016 as a consequence of inherited weak financial performance.
PNBST's obligations at that time included the development of four units at Muritai (Eastbourne).
The three titles at Shelly Bay were sold in order to fund the Eastbourne project, iwi members were told in the newsletter.
"We assure you the sale did not constitute a major transaction nor were we taken advantage of by developers.
"We received a price and an arrangement we considered fair to both ourselves and the party we sold to - The Wellington Company.
"We took valuation advice at the time of the sale of the three titles to ensure we were acting professionally."
The sale of any land is not taken lightly, nevertheless the Shelly Bay sale was essential to the survival of PNBST, the newsletter reads.
"We are at a loss to explain why others are so interested in our land … we make no apology for the fact we have had to sell land to ensure that the Trust survived."
Developer Ian Cassels sent his own email to Wellington's mayor, city councillors and WCC chief executive Kevin Lavery the night after the iwi newsletter was distributed.
The last month has been challenging, he said.
"While working through the process of lodging the resource consent, the challenges posed by factually incorrect and inflammatory rhetoric from the opposition campaign has been becoming increasingly more vocal.
"You will appreciate that, as private entities, for us normally this level of scrutiny would only take place in a courtroom setting, as opposed to in a public PR battle."
Cassels said he was aware some councillors were getting ready to make public statements about the project.
Last month mayor Justin Lester told councillors to be careful what they say due to the likelihood of further litigation.
In his email Cassels told councillors he wanted to meet as an opportunity for them to clarify and ask questions before making any public sentiments.
"We appreciate that WCC is an important stakeholder to the Shelly Bay project, not only as a development partner but also because your constituents in your wards will no doubt be looking to you for clarity."