A controversial housing development at Wellington’s Shelly Bay will no longer go ahead and the land there has been sold to famous filmmaker Sir Peter Jackson and his wife Dame Fran Walsh.

The shock announcement was made in a joint statement from the parties involved this afternoon.

Shelly Bay Taikuru Limited and The Wellington Company announced today that they will not be going ahead with the planned development, saying the decision was “carefully considered”.

The Wellington Company was behind the $500 million development, which was to feature 350 new homes and has divided local iwi.

Developer Ian Cassels said the project has been an “incredibly challenging project on multiple fronts”.

“An enormous amount of work has gone into the project to date, and we’d like to express our sincere thanks to those that have supported and assisted us along the way.”

Sir Peter and Dame Walsh are the new owners of the private landholdings.

Shelly Bay, Miramar. Photo / Mark Mitchell

”It’s a wonderful coastline that holds a great deal of cultural and historical significance. Suffice to say we are looking forward to restoring the natural beauty of the bay,” they said.

The couple said their immediate goal is to start landscaping and replanting work to return Shelly Bay to its natural state.

”Longer term, we’re keen to look at ways it could be used for both arts and recreation.”

Jackson and Walsh also plan to restore the two buildings that remain on the site as well as return the rest of the area to its natural state.

Cassels said he genuinely wished them all the best moving forward with their plans for the bay.

“Whilst the project’s cancellation brings about a shift in plans, it opens the door to opportunities for Shelly Bay that will hold different kinds of value for the community and future generations,” he said.

”It also enables us to refocus energy into our affordable housing initiatives, which to me is ultimately more important.”

It’s understood the deal has been in the works for a few weeks and the Wellington Company made the approach to Walsh and Jackson who have shared a long-held interest in the area.

The Wellington Company will re-prioritise and focus its efforts on several developments it currently has underway, including affordable housing.

Asked whether Mau Whenua, the group that occupied the land in protest of the sale between 2020 and 2022, or iwi were involved, the couple said they have been working under a confidentiality agreement since the land was offered to them a few weeks ago.

”However, we completely understand and respect the cultural significance of the land and are happy to discuss our plans with iwi.”

The saga of Shelly Bay

The prime real estate on Wellington’s Miramar Peninsula was earmarked for a $500m development, featuring 350 new homes, a boutique hotel, and a village green.

However, the plan has been bogged down in legal challenges and disputes since its conception, making it one of the capital’s most controversial issues.

The land was previously occupied for 525 days by Mau Whenua - a faction of Taranaki Whānui who disagreed with the sale of the land.

The group claims the Port Nicholson Block Settlement Trust (PNBST) went against the will of its own people when it sold its land at Shelly Bay for development and that the deal was done in secret.

The situation reached a tipping point following two notices for Mau Whenua to vacate the land, after occupying it for a year.

In May 2022, the occupation came to an end.

Georgina Campbell is a Wellington-based reporter who has a particular interest in local government, transport, and seismic issues. She joined the Herald in 2019 after working as a broadcast journalist.

Vita Molyneux is a Wellington-based journalist who covers breaking news and stories from the capital. She has been a journalist since 2018 and joined the Herald in 2021.