A 10 year battle by Dunedin City Council to turn the city's harbourside industrial area into warehouse apartments and tree lined boulevards is in tatters.
The council spent over $1 million defending its Plan Change 7 vision in the Environment Court, but it's now withdrawn. The land will revert to its original use.
However, a few streets to the south of the Steamer basin will be redeveloped for mixed use.
Otago Chamber of Commerce chief executive John Christie says hundreds of people's livelihoods were threatened by the plan to change the area from industrial to mixed use residential.
Eight heavy industry businesses challenged the plan.
Cr Colin Weatherall was appointed mediator. He says the impact of the world recession reduced the potential of the original development.
Farra Engineering chief executive John Whitaker says heavy industry and residential apartments were never going to mix.
With the prospect of offshore oil exploration in the region, Mr Whitaker says the harbour foreshore will be needed for onshore infrastructure.
The Chamber of Commerce says now businesses can plan, secure in the knowledge that their right to continue working in the area is guaranteed.
