Cr Smith, who is also the Queenstown Lakes deputy mayor, is seeking advice before commenting in detail on the court decision dated last Wednesday.
The potential development was "greater than anyone had originally imagined" when it was first mooted.
"It will come as a huge shock and disappointment to the community."
On his initial review of the decision, it was "highly unusual" the court had provided for development on a prominent ridgeline next to an outstanding natural landscape.
"On face value this is out of step with usual resource management practices in this district."
He had nothing more to add at this stage.
Alistair Munro owns property near Sticky Forest and received a copy of the decision on Friday.
It was a "significant win" for the appellants, the late Mike Beresford, the late Theo Bunker and Lorraine Rouse.
The appellants were supported by lawyers for the Attorney-general at the hearing.
They descend from 50 Maori landowners who received Sticky Forest as redress for the Crown’s broken promise to provide land for them at the Neck, between lakes Hawea and Wanaka.
Sticky Forest is managed by the Crown on behalf of the owners, while a transfer is settled under the Ngai Tahu Settlement Act 1998.
However, the forest has become a popular mountainbiking and walking spot and is promoted by Bike Wanaka and Lake Wanaka Tourism.
"I suspect that there will be some disgruntled members of the mountainbike community with the outcome", Mr Munro said in an email.
"I would encourage them to read the full report, as it explains in depth the wrongs that have been done to the Ngai Tahu Whanui involved, and the responsibility on the Crown to right those wrongs."
He believed the ruling was "not yet fully complete".
"There are a few things that need to be cleaned up, but the direction is very clear."
Kirimoko Management directors John May and David Barton also gave evidence to the Environment Court, which was rejected.
The Otago Daily Times has contacted the appellants’ Wellington lawyer Ian Gordon, who said the Environment Court relied on evidence given to them by the late Dr Terry Ryan, an expert on Ngāi Tahu genealogy.
He was thrilled with the "terrific" outcome for the appellants, and emphasised the Crown had turned "a blind eye" to building of mountainbike tracks.
What is planned
What: Sticky Forest is a 50ha rural-zoned pine forest containing about 30km of locally built bike trial.
Where: The forest is sandwiched between Northlake, Kirimoko and Peninsula Bay subdivisions, and Lake Wānaka, east of Wānaka near the Clutha River Outlet.
The appeal: The appellants sought residential rezoning of 19ha of their whenua/land, to allow development of about 150 houses, while retaining rural zoning over the rest.
The land: The Environment Court agreed the forest should be known as "Hāwea/Wānaka — Sticky Forest". It is being transferred to the intended owners under the Ngāi Tahu Settlement Act 1998 as part of redress for breaches of the Treaty of Waitangi. It is landlocked with no vehicle or legal access.
The decision: Judges John Hassan and Sheena Tepania and commissioner James Baines said the key issues from the zoning options put forward were related to the proper recognition of the relationship of Māori to their culture and traditions, landscape values and best representation for integrated urban development.
