A Bay of Plenty Times reporter at the scene said about 12 more armed offenders squad members had arrived at the scene about 9am as well as an ambulance and a dog squad.
Bangs from what sounded like flash grenades were also heard.
A woman, who wanted to remain anonymous, told the Bay of Plenty Times traffic was backed down to the lights by the kindergarten in Otumoetai Rd this morning.
A man who lived within the cordoned area said he heard six or seven "pop, pop, pops" and an ambulance arrived 20 minutes later.
The man said he was worried about some of his family who were still at home during the police operation.
No arrests have been made at this stage, a police spokeswoman said.