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Developer Lane Hocking, of Universal Developments, yesterday said he was "absolutely 100%" committed to the project, which will be marketed as "Longview".
In contrast, the other Upper Clutha special housing area project — Bright Sky, on the outskirts of Wanaka — has been abandoned.
Bright Sky Land Ltd director Grant Bisset confirmed this week the decision was taken in March not to proceed with the 281-lot SHA.
The property is for sale.
Mr Bisset blamed the Queenstown Lakes District Council, saying the company had gone to significant expense and effort to meet deadlines but "the goal posts have been continually moving".
In a statement yesterday, general manager planning and development Tony Avery said the council was disappointed the developers decided not to proceed.
"Despite working extensively with the developers on the proposal there were still a number of consenting issues to sort through, including some access issues, when they decided to not proceed."
Mr Bisset said the company had not expected there would be a need for the project to be notified.
Mr Avery said the Housing Accords and Special Housing Areas Act required the council to consider notifying owners of land adjacent to any proposal.
"[Council] will continue to work with developers to realise future development under the current district plan provisions which provide for residential development on that site."
Mr Hocking said the civil construction work for Longview would be tendered late this year and site work would start on the first working day next year.
The development would have sections of between 300sq m and 600sq m priced at between $199,000 and $299,000, and house and land packages from between $464,000 and $650,000.
A prohibition on visitor accommodation was removed.