Mr Talbot said he was disappointed the festival would not take place at the picturesque site.
Instead the event would go ahead at a central Auckland location on January 11 and 12.
Camping would not be an option any more, he said.
"We have been working extremely hard for many months to go through the resource consent process, but ultimately we needed to make a decision to move the festival," he said.
"We did explore a range of other options in the Bay of Plenty and other areas, but Auckland is the best solution given the timeframe."
Western Bay of Plenty Council consent manager Chris Watt said the council never received an application for resource consent to hold the festival in the area.
Shanaye Williamson won two three-day festival tickets for her and her husband from a radio station for the festival.
"We were going to go as a big group and all camp out there. It was a concert we could all go to. I've got some friends with kids and they could've come."
Mrs Williamson, 24, said they went camping in McLaren Falls Park every year and it would be the perfect location for a festival.
"We were stoked. We've always talked about Tauranga needing more events like this. There's absolutely nothing out here any more for people who like music. It's either Auckland or nothing. We have venues, we have heaps of space. It'd be nice to have something for the younger people to do where its also a safe environment."
Former Tauranga resident Brent Ireland had been planning to fly home for the event.
"The fun police strike again all because they can't handle a bit of noise in their backyard for two days of the year," he said.
"They quickly forget about the million-dollar spinoff this would have had for the area, and the ongoing exposure on the international scale that this event would have created. Tauranga says it wants to move ahead and be more appealing but if the most exciting thing that's allowed is some statues on the waterfront, then it's not going anywhere."
Motel association treasurer Kris Stamatakos said the move was a huge disappointment.
"To lose it to Auckland, its ludicrous. We need these things in the city." Ticket buyers will be offered full refunds or the option to transfer them to the new event.
Details, including confirmation of the venue, ticketing transfer options and more acts, will be released on October 28.