The lawyer representing Māori living south of Whangārei Harbour says there could be a drop in the number of houses planned for land which used to be owned by a local hapū.
The Patuharakeke hapū once owned all the land in Bream Bay and last year opposed a plan change that would allow the Whangārei Racing Club to develop 56 hectares sold to it by the Crown in 1991.
The appeal to that plan change is before the Environment Court.
The lawyer for the hapū, Prue Kapua, said the land could potentially be returned to Patuharakeke as part of its Treaty settlement and having a development on it would make the return of the land much more difficult.
"What has occurred is a plan change, not just a resource consent with conditions. It is complicated though as the controls affect the whole plan change so we are still in mediation, but have some terms of reference now as to where it's going."
Ms Kapua said those terms of reference involve the setting up of a working group.
"All parties have agreed to the creation of a working group as some common ground has been achieved.
"A mediation conference was held in July and normally there would be an indication on the day as to whether an agreement would be reached, but the process has been unusually protracted due to the myriad issues raised that need to be settled."
The hapū wants the number of houses on the land reduced, she said.