"With the expansion, the arena would be the third-biggest indoor court sports facility in New Zealand," he said.
Council said keeping the projected rates increase close to what was consulted earlier this year was a "key consideration" for Hastings district councillors in Tuesday's deliberation.
The council has agreed to contribute money towards several projects of importance to residents, with others still to be approved.
It is yet to make a decision on purchasing the Tōmoana Showgrounds.
If the council decides to buy the showgrounds, Hastings homeowners could see an average rate increase of 6.9 per cent.
The final decision on the Showgrounds will be made on June 23, and the final Hastings average rates increase will be confirmed and adopted on June 30.
Hazlehurst said that while it was disappointing to not be able to approve all funding requests, the council was mindful of trying to minimise the rating increase.
"We've been very conscious that we went out in our Annual Plan with a rates rise expectation of 6.6 per cent that we consulted on," she said.
"But when we go through the Annual Plan process, we have the opportunity to hear what other projects are out there that could support the community."
Projects to receive funding included Te Mata Park for the provision of essential water services for users, the Havelock North Village Carnival for this year's event and support for the costs of maintaining Te Pōhue domain and Okawa Esplanade Reserve.
Several other requests were able to be funded from existing budgets, thus having no rating impact.
This includes a renewal of tennis courts at Memorial Park in Haumoana, Flaxmere College landscaping works that would benefit the wider community, and some streetscape enhancements in the Market Street area of the inner city.