Questions have been raised about what will happen to a community of low-wage migrant workers if a proposed hot pool and spa facility is given the go-ahead in Queenstown.
The workers live in 167 cabins on the site of the former Lakeview Holiday Park overlooking Lake Wakatipu, with some paying as little as $200 a week in rent.
Many are migrants who work in the service sector for the town's tourism industry.
The reserve area at the junction of Thomson and Man Streets is currently part of the old Lakeview camping ground, which is owned by Queenstown Lakes District Council.
The council today notified its intention to lease a tranche of the land to Ngāi Tahu Tourism to develop and operate a "high-quality, premium hot pool and day spa facility".
The development and roading would wipe out a significant number of the workers' cabins as a result.
"Notifying our intention kick starts a public process and we encourage anyone interested in the proposal to take a look at the information online and make a submission," council chief executive Mike Theelen said.
The proposal caused The Rees Hotel and Luxury Apartments chief executive Mark Rose to question what was next for the tenants.
"If these people all go and that's taken out ... where are they going to go?" he said.
"It's a nightmare."
Mr Rose had often "gone into bat" for migrant service workers and said this matter was no different.
"It's just incredible," he said. "I don't know how we can go on taking out housing stock from the system.
"For the town to continue to be what it is and for people to be working in service, we have got to have places for them to live."
He believed the Lakeview area should have been used for affordable housing.
Queenstown Mayor Jim Boult defended the council's proposal and said few would be affected by the proposal to lease some of the site to Ngāi Tahu Tourism for the spa facility.
"Our prime interest is in providing long-term, permanent accommodation for people who want to live and work here, whether that's rental accommodation ... or leased land and own the house ... or one of the other initiatives we've come up with," Mr Boult said.
"But providing better style, more appropriate accommodation for itinerant workers.
"At this point there's only six cabins going with what is confirmed."
He confirmed 100 cabins would eventually be removed from the site when the redevelopment, which included a market plaza and access road, was completed.
However, that was likely a decade away and the council was working on a number of initiatives to provide long-term, affordable and quality accommodation to workers and families during that time, he said.
The intention was to retain 48 of the cabins in the "Lynch Block" area which bordered Glasgow Street.
The council was also assessing using a part of the Lakeview area for worker accommodation.
Queenstown Lakes Community Housing Trust executive Julie Scott said the matter of where those workers would go was "a good question".
"Certainly some of those that are permanent residents will be on our waiting list so we will be looking to help them when we can and the reason we will have the funding to do that is because the council has recently committed 5 percent of any sale proceeds from the land up in that Lakeview area will go to the trust," she said.
"So that's a potentially huge sum coming to the trust and that will potentially help some of these households into new homes in the district."
She conceded it was a "tricky one" considering the accommodation pressures being felt in the town.
"Council is very aware they will be putting a number of people, potentially higher-needs people, out of their homes," she said.
"But they are aware of that and are working with the trust to find solutions to that. I know the council doesn't want to throw people out onto the street."
The trust would assist any permanent residents where it could, however the situation was murkier for transient workers.
Submissions close on 22 December and a hearing will follow on 19 February.
The final decision on granting the reserve lease would be made by the full council following the hearing.