A bid to legalise the boatyard's use of the reserve via an Act of Parliament failed in 2009 when the speaker ruled a public bill could not include a clause confering private benefit.
The latest twist came at a Bay of Islands-Whangaroa Community Board meeting earlier this month when members backed a recommendation by the council's in-house lawyer to give Mr Schmuck permission to use specified parts of the reserve. That includes a strip along part of his property boundary and a corridor on either side of the existing slipway.
Changes to the Walls Bay Management Plan were detailed in the board's agenda but the discussion was held behind closed doors. The decision still has to be approved by today's full council meeting.
Far North Mayor John Carter said the council would vote on the issue on October 30 but he expected it would end up being resolved in court.
"I want to get it off our books. It has cost too much and gone on for too long."
Long-time Opua resident Myra Larcombe said the community board had failed to implement the Walls Bay Management Plan adopted in 2013 and, adding insult to injury, council staff had met privately with the boatyard owner and altered the plan to accommodate his wishes. No reserve in the Far North would be safe if the proposal succeeded, she said.
Northland-based Green MP David Clendon said coastal reserves were highly valued public assets and should be protected.
"There's a danger that surrendering the reserve to private use will be used as a precedent, and will encourage others who might aspire to a similar annexation of public domain," he said.
Mr Schmuck and previous owners have always had the right to haul vessels up a slipway across the reserve to the boatyard.