ACC has abandoned plans to build a hub on a plot of land in North Dunedin and says the site is needed for roading adjustments to accommodate the new Dunedin Hospital.
In 2016, the Dunedin City Council offered its Frederick St car park to the ACC so it could investigate the site's potential for its new city headquarters.
But the ACC now wants to lease a building in the city rather than consolidate into one new building.
Before the site was offered to the ACC it was earmarked as a potential area for the Dunedin Hospital redevelopment.
The council gave the ACC a due diligence period of a year to assess the site's potential.
That period has lapsed.
ACC spokesman James Funnell said the reason the site was turned down was because part of it would be required for roading adjustments to accommodate the new hospital.
Dunedin Hospital rebuild convener Pete Hodgson said the site would not be part of the $1.4billion hospital rebuild.
Mr Hodgson said he unaware of any road adjustment work needed to accommodate the new hospital near the car park.
When it was announced the DCC said the agreement was part of an exciting potential development for the city.
DCC chief executive Sue Bidrose said since the due diligence period had now lapsed the DCC planned to continue operating the site as a car park.
Asked if the DCC had been approached about the use of the site for the new hospital, Dr Bidrose said any questions about the new hospital needed to be referred to the Southern Partnership Group.
