Wellingtonians will be "largely pleased" about the scrapping of a controversial $500 million development at Shelly Bay, a councillor says.
On Friday, it was announced the project would no longer go ahead and the sprawling site had been sold to filmmakers Sir Peter Jackson and Dame Fran Walsh, who say they will restore it to a natural state.
It is also a habitat for kororā penguins, which have been blocked from reaching their nests by construction fences.
Former Wellington mayor, Andy Foster, who staked his election campaign on opposing the major housing development was thrilled by the news it would not proceed.
He was also "delighted" Sir Peter and Dame Fran, who supported his mayoral campaign in 2019 for standing against the development, had committed to restoring the site.
"It's a special piece of land, much loved by many Wellingtonians, particularly those people who live on the peninsula, and I hope that it gives the opportunity of combining Shelly Bay with Mataimoana / Mount Crawford above it, and creating a truly fantastic national heritage park, which I think will be a jewel in the crown for Wellington."
The owners of Chocolate Fish Cafe, a destination cafe in Shelly Bay, said they were ecstatic.
Managing director John Pennington said he was looking forward to seeing a big green space instead of the planned buildings.
"We've just gone through two years of civil works, demolition and then finally the fire in June, I mean it's been pretty tough on business all around.
"Covid was pretty easy compared to this."
The cafe has been closed since the fire caused an asbestos risk, but it was expected to reopen this month.
But Wellington city councillor Sarah Free said she was surprised by the news.
But Free said she expected residents would largely be pleased with the outcome.
"People did see that there were going to be problems with the traffic, problems with the actual width of the road and sharing that space with cyclists and walking."
Free said the focus now needed to shift to making some plans for the nearby Watts Peninsula.
On Friday, Wellington mayor Tory Whanau said the council was only informed of the sale that morning.
"It's been an incredibly confidential process that council were not part of."
She said Wellington City Council will be "sitting down with Fran and Peter over the next few weeks and talking about what will happen with that land".
"I know that they have a passion for nature like many Wellingtonians, and I feel like the community around Shelly Bay will be pretty happy with that outcome also."
In a statement, Sir Peter and Dame Fran said the immediate goal was to "start the landscaping and replanting work required 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".