The work is expected to be completed by the end of next month.
The garage at the back of the house will stay.
The property and land were bought in 2019 as a strategic investment and will be used to accommodate the growing need of sport fields and recreational space in the district.
The council publicly confirmed it had bought the large family house and 14ha of grounds for $13.78m in 2019.
In 2022, councillors requested an investigation into turning the current residential property into a community facility, noting that its use as such had not been the original intention of the purchase.
Council sport and recreation manager Simon Battrick said the prohibitive cost of retrofitting the current property and the presence of toxic mould meant that the best course of action was to demolish the building and prepare the site for future community use.
“Clearing 516 Ladies Mile of the current property will enable future community use of the site as part of the overall Ladies Mile Masterplan. As we look to the future, this area will be an important community asset for the growing Queenstown Lakes District.”
The area has been earmarked for development with housing, schools and sports fields on the agenda.
The draft long-term plan 2024-34, due for consideration on June 27, includes a proposal to bring forward development of the 516 Ladies Mile site.
If approved by councillors, consultation on the draft LTP will run from June 28 to July 28.
The demolition contract was awarded to the Invercargill-based contractor Ryal Bush Transport.
