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Heart of the City chairman Terry Gould said the extra funding sources were no longer available.
Back in 1979 Santa stood on the corner of Farmers. Photo / Herald Files
"We use to get funding from the council, from the CBD advisory board and some other sources. Over the past few years the funding has reduced to the point where the installation costs are just unacceptable."
Santa's increasingly expensive set-up costs and reduced funding had been under discussion for four years and Heart of the City's 10 voting board members decided unanimously to retire him last week.
"We do realise that many, many people have got great sentimental attachment to Santa," said Mr Gould.
"It's been a difficult but prudently thought-through decision. It's just become an increasingly large part of our Christmas budget to the point where we just have to look at that and say we cannot justify that cost."
Chris Cherry, owner of fashion label Workshop and Heart of the City board member, did not think Santa's absence would make much of a difference.
"The heart of the city is much greater than Santa. The attraction really is the city itself," Mr Cherry said.
Stephen Hanford, who bought Santa in 1998 for $1 from Farmers, said it cost a fraction of Heart of the City's quoted $180,000 to install him from 1998 until 2003, when he sold Santa to Whitcoulls and moved to Australia.
Mr Hanford said he saved Santa once and was mildly cheesed off he was being retired.
But Tony Webb, director of Northshore Scaffolding, which has assisted in the display's installation and dismantling since 1980, said the $180,000 installation cost sounded "about right".
It took about a week and required road closures and extensive planning and safety procedures, he said.
Although there are no plans to remove Santa from the Kelston warehouse where he spends most of the year, Heart of the City says it has not ruled out his return.
"You never say never, and if the public felt such about it that they were prepared to somehow find funding to the tune to $180,000 then that would be a fantastic result," Mr Gould said.
"If there is interest next year, including financial commitments from other parties to reduce the cost to Heart of the City, then the board would reconsider its decision."
In 1996, Farmers decided not to put Santa up at its Hobson St store in the city and Mr Hanford, a marketing and events consultant, spent two years negotiating to buy him.
In 2008 Whitcoulls declared it could no longer absorb Santa's costs, which had risen to $55,000, and gifted him to the city.
The Santa Parade will still take place, on November 30.
Mr Gould said Heart of the City will celebrate Christmas with new lighting and banners across Queen St and other roads. It will also host Christmas events and activities.
Asked if he would save Santa, Auckland Mayor Len Brown said: "People with ideas about how to support Santa's continuing presence in the city centre are encouraged to come forward."
Whitcoulls had no comment.
Sleigh ride extraordinaire for giant St Nick
1960
Farmers put a 4535kg Santa on the front of their building on the corner of Hobson St and Wyndham St in Auckland. The fibreglass and steel tubing structure is 18m high.
1990
The building is sold so Santa moves to Manukau City Shopping Centre, where another Farmers store is located. He graces the building between 1991 and 1995.
1996/97
Santa's appearance is deemed too tatty so he's not put up.
1998
Marketing and events consultant Stephen Hanford buys Santa from Farmers for $1. Santa is restored and put up on the Whitcoulls building in Auckland's Queen St.
2003
Mr Hanford moves to Australia and gives Santa to Whitcoulls.
2008
Whitcoulls can't absorb Santa's costs so he is gifted to the city.
2009
After a $100,000-plus makeover, a new-look, friendlier version of Santa is unveiled. Sculptor Damien Kutia, who revamped Santa, put his freshly removed "dodgy winking eye" up for sale on Trade Me. It sold for $790.
2014
Santa is put into retirement for a second time, after Heart of the City decides he's too expensive to put up.
- Additional reporting Susan Strongman
