The original deadline for sale of the Kainga Ora-owned Aaron Lodge property was March 5, but estate agent Colliers confirmed the deadline had been extended.
Kainga Ora purchased the property in 2021 for about $4 million.
After being used as a supported isolation and quarantine facility, it has remained empty, gathering weeds and leaving the public wondering about its future.
Dunedin Mayor Jules Radich expressed a desire for the council to take over the site and use it to address the city’s homelessness problem, but Housing Minister Chris Bishop rejected Mr Radich’s idea in July last year.
The property was put out to market in January by Kainga Ora.
A Kainga Ora spokeswoman said negotiations for the former Aaron Lodge site were ongoing.
"As this process remains confidential due to commercial sensitivity, we are unable to provide any further details at this stage."
Documents released under the Official Information Act show Kainga Ora officials struggling to find solutions to the many problems the site posed.
One adviser spoke of "increasing construction costs since the acquisition of the property have resulted in a higher than expected cost estimate to redevelop the property".
There were various other hazards on the property, including, but not limited to, stormwater retention/treatment, flooding, raised finished floor levels, council road layout changes, earth retaining structures, soil contamination and a buried tank.
Kainga Ora had spent more than $164,000 on the site before it decided to sell it.
"After our discussion on the ‘pros and cons’ to keep or sell the property, it was agreed we should sell the property with the two lots being sold separately."
In issuing a notice to dispose the property, Kainga Ora noted that despite Dunedin’s emergency housing waiting list being more than 550, the property had "no lettable units in its present state".
The value had decreased since Kainga Ora purchased the property, briefing notes showed.
Among the issues that needed to be addressed before sale included ground retention, public underground services and slope instability, while there was also a likelihood of lead, asbestos, diesel and pesticide contamination.
In rejecting Mr Radich’s idea last year, Mr Bishop said the building lacked "local services required for a cohort of individuals with complex needs".
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