Department of Conservation turned down the chance to buy land in the Bay of Islands, leaving it to be readily snapped up on the open market, according to New Zealand Herald.
Elliot Bay, 30km east of Russell in the Bay of Islands, has been a semi-private popular surfing and camping spot for around 200 campers every year.
John Elliot, 75, owns the 720ha farm which backs onto the beach, named after his family.
Campers have crossed the farm to pitch tents at the beautiful destination for more than 60 years.
However that may all change after Mr Elliot and his family decided they wanted to sell all but 50ha, and DOC didn't weigh in on the sale.
He told NZ Herald the family want it to be left in the condition that is in now, and wanted to offer it to DOC first with the chance to pay it off over 20 years.
But DOC could not justify the purchase on recreational terms after already owning five other campsites in the area, and the farm conservation values did not meet a required threshold.
They family didn't want to settle for less that $15 million, which they say was already a discount on the $20 million value they believe it to be.
The property will likely to appear on the open market early next year, and Mr Elliot suspects there will be public uproar.
Far North District Council district plan manager Greg Wilson told NZ Herald that development on the site was possible so long as it met resource consent.
He said subdivision is more difficult in that location and consent would be toughened through assessment process.
The Government has valued the property at $6-8 million, but Mr Elliot is unsure what it will eventually go for.
27km away Helena Bay was sold to Russian billionaire Alexander Abramov for $15.9 million, which Mr Elliot said had set a benchmark for the area.
Mr Wilson says development similar to Mr Abramov's is unlikely to be possible for Elliot Bay.
Elliot Bay is not alone, with a number of popular camping grounds across the North Island appearing on the market, such as Hahei Holiday Resort and Whangamata Motor Camp in the Coromandel.
Takapuna Beach Holiday Park in Auckland's North Shore had 80 percent of the community voting to keep it after a local board survey.
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