Mystery still surrounds the fate of Hastings' oldest building, the Albert Hotel, more than two months after it sold at auction.

The derelict central city building, which has been vacant for almost two years, sold for $410,000 at a mortgagee sale in June. Yet a "For Sale" sign still hangs on the building on the corner of Heretaunga St and Karamu Rd.

Colliers International sold the building at auction to the only bidder, who negotiated the price over the phone. It had been on the market since 2010 and had a rating valuation of $900,000.

Colliers director Cam Ward was tight-lipped about the sale. When asked if it had fallen through, he said: "I have no comment."

However, Hastings councillor Sandra Hazlehurst believed the Kaitaia buyer had walked away. "I'd say he's well and truly gone," she said yesterday.

"There's people looking at it, but certainly no action at this stage. I'd love to be telling you there was a new building with retail at the bottom and an office at the top going to be built in a couple of months time - but there isn't."

Developers have shied away from the old hotel because Hastings District Council gave it a "dangerous building status" in 2010. The Historic Places Trust also reclassified the Category 2 listed building, stating that just the facade of the 1882 wooden building had to be kept while a new building could be put in behind it.

However, Ms Hazlehurst believed that classification and the cost of getting the site ready for redevelopment were putting buyers off. A buyer would have to pay removal costs and fork out for an archaeological dig because the site was more than 100 years old.

"Before you get a clear section, you've got all of that on top of it."

Ms Hazlehurst wanted the Historic Places Trust to reconsider its assessment of the building because its age, along with vandalism, meant the once grand hotel was now in a run-down state.

People had broken into, set fires and lived in the empty building.

She said it was vital that the site be redeveloped because it was such a prime piece of real estate and it was holding back the revitalisation of the east side of town.

Australian immigrant William Dennett built the Albert before he went on to become mayor of Hastings.

The last owner, Durney Land Company, paid $850,000 in 2002. It was run as a pub until the company went into liquidation in December 2009.

- © Fairfax NZ News