A fire has completely gutted an iconic warehouse building in Wellington's Shelly Bay on the Miramar Peninsula which has been the site of years of drama and controversy. 

Shelly Bay. Fire - Figure 1
Photo RNZ

The hotly contested housing development finally got underway last year after court battles, occupations by protesters, and objections from locals residents, politicians, and film director Peter Jackson. 

Huge flames snapped and crackled, engulfing the landmark sawtooth-shaped building in Shelly Bay as fire fighters desperately tried to save the building.

Perched by the sea, it was completely destroyed in the blaze - all that remains is a few blackened and smoking supports. 

Local resident Justin Harris' place overlooks the carnage.

"I was literally just coming along Evans Bay and I saw ... the smoke and I was like 'crap, I better get home'."

The building was derelict and had been boarded up awaiting demolition. Harris had been watching for weeks from his balcony as wharf next to the sawtooth building was slowly disassembled and removed. 

"Now it's just, snap - gone."

Shelly Bay. Fire - Figure 2
Photo RNZ

Asbestos fears prompted Fire and Emergency to warn residents to keep doors and windows closed, although it said it was a low risk. 

Thankfully a brisk southerly blew smoke and any particles away from nearby houses. It was the latest drama to beset the area plagued by controversy.

Last year after the Parliament protests ended in a fiery riot, a group set up camp in on the peninsula before finally being evicted after 120 days.  

Photo: RNZ / Angus Dreaver

It come on top of a long-running dispute, which saw a group from a local iwi occupy the site of the proposed development for more than a year protesting the iwi's sale of land to developer Ian Cassels.

It was finally resolved last year after a 525 occupation. 

The development has seen the subject of a number of court battles. It has also been opposed by the former mayor Andy Foster and film director Peter Jackson.

Many locals also told RNZ today they still did not want the development.  "We haven't got the infrastructure and the roads to cope with a big development like that. It's really bad," one said.

Shelly Bay. Fire - Figure 3
Photo RNZ

Another said: "It's such a beautiful area that is going to be lost to Wellingtonians because you are going to have traffic, buses, cars continuously on that road."

Many residents told RNZ they believed the fire was suspicious. Police and Fire and Emergency NZ are investigating the cause of the blaze. 

The group Buy Back the Bay had been fighting to save and restore the sawtooth building, and had been talking with lawyers about possible legal action to stop the demolition.

Group spokesperson Mary Varnham said the site should be treated as a possible crime scene, and she was demanding answers.

The council owned the building and the land, but leases it to the property developer Ian Cassels, who declined to comment.

Chocolate Fish Cafe owner John Pennington, who lived directly over the road, said he was hoping to get the asbestos all clear so he could open as usual tomorrow.

"So far we've been ... a demolition site, now a building site, we've had an occupation here. We just hope that we can keep carrying on doing our best."

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