A multimillion-dollar hospital upgrade has been delayed because some buildings lie in the path of a potential debris flow - the destructive force that wiped out the Bay of Plenty town of Matata.
Work at Thames Hospital has halted while implications of an expert report are assessed.
Residents who live near the hospital and close to Karaka Stream - where the catchment is part of "a series of large debris fans" - learned about the hazard from the Thames District Council in a mail drop.
Property values of at least 33 homes could be hit by the findings of the Institute of Geological and Nuclear Sciences draft report, set to be released in its final form at the end of the month.
The homes, in Bella St, Motatau Rd, Eden St, Karaka Rd, Pahau St and Redwood Lane are in the path of the predicted debris flow.
Environment Waikato, which commissioned the report, is refusing to release the report publicly.
But the council says it has a "legal duty" to include the potential environment hazard on Land Information Memorandums (LIM reports).
Debris flows carry loads of shingle and rock rapidly along steep channels. Matata was flattened by a debris flow in May last year.
Scientists estimate the probability of such an event in Thames as once in 500 years and note the town has not been hit since its founding in 1867.
Health Board spokesman Philip Renner confirmed "construction timelines" had been affected, pending the report's findings.
"We had hoped to start things at the end of last year. The good news is that we will carry on in providing the same sort of services that we were always going to provide."
Mr Renner could not say what the cost implications of the report were as it was too early to confirm such things.
"We don't know what the end result is going to be."
Although it was likely the carpark would need reshaping it was not necessarily the case that buildings would need reconfiguring, he said.
Affected Karaka Rd resident Terry Gilpin said he would be extremely angry if property values in the area fell. He had lived by the creek for 53 years. "I know what it can do ... it isn't prone to any risk."
Another resident who did not want to be named said the council should have done more maintenance over the years to protect the area.
"I think they are overreacting a bit, they are doing it to put off the development of the hospital. The Karaka Stream received extensive flood protection work some years ago when water went through the hospital basement."
Many settlements across the Coromandel have a history of being plagued by flooding.
Last October the Herald revealed that the Waiomu Holiday Park camping ground was being forced to close because of a high flood risk (in June 2002 Auckland woman Dorothy Newall died when she was swept away by flood waters that hit the camp ground).
In addition, four Albert St properties in Coromandel town, plus one in Thames, were "retired" by the council due to their location in an unacceptably high flood-prone area.
The council said it was investigating the possibility of retiring a further 19 properties in Tararu, Te Puru, Waiomu-Pohue, Tapu, and Coromandel town.
Environment Waikato is spending $28 million over the next 20 years to protect the peninsula's infrastructure from the effects of flooding and erosion.
Disaster threat stops work on hospital
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