Superyacht firms say their multi-millionaire customers will sail off to Australian shipyards for lucrative refit and service contracts if Auckland does not develop more deep-water facilities.
Marine Industry Association executive director Peter Busfield said the industry's ability to grow depends on what facilities it could guarantee potential customers.
The key to handling future growth is a 10ha piece of bare land, owned by Auckland Council next to the burgeoning Hobsonville township.
This has a path to deep water in the Waitemata Harbour for launching and retrieving large yachts.
For more than a decade, the former air force base land had been reserved for a marine industry cluster as part of a council plan to boost local jobs.
However, the council now wished to free up the land for housing and Auckland Council Property Limited (ACPL) decided to terminate the provision for Hobsonville's Yard 37.
If ratified by councillors next month, the ACPL move would severely reduce the growth of the marine industry just as business starts to pick up.
"Not a good outlook for the 60 just signed-up boat building apprentices over the last three months to take us to about 400 current apprentices in total," said Mr Busfield.
An ACPL report said only one boat builder was on the land and that terminating the marine use option was appropriate given the poor economic state of the superyacht industry.
It is unlikely that the industry would be able meet a pre-condition that a certain percentage of the land be sold to boat firms.
This uncertainty had to be balanced against the result of rezoning the land for a Special Housing Area - at least 10 per cent of housing would be priced at or below 75 per cent of the region's median house price of $428,000.
However, Mr Busfield said killing the Hobsonville option was short-sighted.
Only three superyachts were under construction, he said, mainly because of the high exchange rate.
"But we believe that there is an ongoing market for super yachts to be built and more so the superyacht refit trade."
Tourism New Zealand and NZ Marine had teamed up to attract more super yachts to visit, because last year 35 visiting vessels spent $185 million on marine services and $95 million on tourism.
The aim was to double visits by 2018.
Mr Busfield said there was renewed interest in Yard 37 land and facilities in recent weeks and ACPL could at least wait a year.
Alloy Yachts managing director Tony Hambrook said the firm was interested in using the land.
The Henderson company had a large motor-yacht under construction and hopes of securing new contracts. This could not only boost its 200 staff, which included 40 apprentices, but increase the need for deep water launching and retrieving of vessels.
"Why would Auckland - the City of Sails - chop up the only vacant land with deep water access inside Waitemata Harbour and put houses on it?" said Mr Hambrook.