Three eateries are locked in a bidding war to secure the Shed 5 lease on Wellington's Queens Wharf.

The old wooden wharf shed building has been leased by celebrity chef Simon Gault's Nourish Group for the past eight years.

The Nourish lease expires in November and rather than simply offering an extension, Wellington Waterfront called for expressions of interest in March, offering to sell a 25-year lease on the property.

Wellington Waterfront chief executive Ian Pike said he hoped to finalise a deal by the middle of August.

The three shortlisted contenders were all in the restaurant/bar trade.

Pike said the lease was coming up to 20 years and this was an opportunity to test the market and to refresh the concept.

This was a one-off opportunity to take it to the market and Wellington Waterfront was interested in getting an exciting concept and design as well as a good financial deal.

However, the decision to open it up to other contenders enraged Gault, who said the council-owned company had been terrible to deal with.

''We had plans for it. We spent money on it. We've painted it, put a new roof on it and we've paid our rent on time and they came to us with a ridiculous offer that nobody in their right mind would entertain.

''They wanted millions of dollars for a 25-year lease up front. It's just stupid stuff. We've been trying to negotiate a renewal and they've just told us 'no, we're going to tender' and we've been blown away,'' Gault has said.

The 835sqm timber-framed building, which dates back to 1886, opened as a restaurant and bar in 1992 after a major refit and the addition of a large conservatory on the harbour side.

The restaurant paid more than $300,000 a year for the lease.

Pike said Wellington Waterfront's preference was to sell the lease.

But the bidders instead wanted annual lease deals with varying lease terms.

Wellington Waterfront was working closely with one of the three contenders on the shortlist.

He was not able to say who they were except to confirm that Nourish Group was one of the contenders.

The building could be in for some substantial changes but the scope of that ''depends who we run with''.

A decision was expected by mid-August and the lease term would probably be for a minimum of 10 years.

All three bidders were  planning to keep it operating as a restaurant and bar so there would be no fundamental change of use.

Meanwhile, Wellington Waterfront is still picking itself up after the recent Environment Court ruling which scuppered plans to put a large office block on land between Queens Wharf and the Railway Station.

Pike said the design brief for the North Kumutoto area had now been revised and Wellington City Council was consulting on this with target groups.

''We are expecting the outcome of that to be about mid-August. They are redrafting that brief taking into account the Environment Court decision which ruled large-scale development would negatively impact heritage values and open space.

The court ruling scuttled a Newcrest Group plan to build a six-storey office block on land opposite the New Zealand Post building on Waterloo Quay.

Pike told Wellington city councillors last month that two smaller buildings similar in scale to the nearby Meridian building could be envisaged for the area.

- © Fairfax NZ News

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