Tainui's business division has pulled out of plans to develop a $26 million hotel and conference centre in Tauranga.
Tainui Group Holdings has done the sums and, despite being named as the preferred bidder to build the project, has told Tauranga City Council it will no longer be part of the scheme.
Tainui commercial arm chief executive Mike Pohio says the decision is financially driven; the costs would be well in excess of the $26 million allowed for in an independent economic report on the benefits of the hotel and conference centre.
Tauranga City Council has started to work with another potential investor on the future development of the site at Durham Street.
An independent economic impact assessment, commissioned by Tourism Bay of Plenty and Priority One in December 2012, showed a 26 million international standard hotel would provide strong economic benefits to the city.
It said every dollar of hotel revenue would generate $1.26 of flow-on revenue in western Bay of Plenty.