Shelly Bay, once described as a jewel of Wellington, is rotting away.

The buildings are in a sorry state, paint is peeling off, the wharf is collapsing into the sea and there is rust everywhere.

The land was owned by the New Zealand Defence Force for 124 years until it was sold to the Port Nicholson Trust for $16 million in 2008, as part of a Treaty of Waitangi settlement.

The land is covered with defence force buildings, and many still have the old signs on them.

The defence force stopped using the area as a base in 1995 and, from the state of the buildings, little or no maintenance has been done since then.

In 2007, before the handover of the land to the trust, Wellington concert promoter and Enterprise Miramar Peninsula spokesman Phil Sprey said the area was a Wellington jewel, which should be developed to cater for a range of uses.

Mr Sprey said this week that Shelly Bay was far from a jewel now.

"In its current state it's not a jewel any more. We need to get on to fixing it smartly. It's one of these things that people seem to be endlessly talking about, but nothing happens," he said.

"It's a very nice area and it now needs positive action. The wharf area is particularly bad.

"The weather and other forces of nature aren't going to sit around while people talk about what should happen.

"The area will just keep on being corroded and eroded."

Despite the state of the buildings, there are a few tenants.

Some of the buildings are workshops and galleries for artists or design businesses. Westside Studios is based there and Chocolate Fish Cafe is a popular spot. The cafe moved into the Submarine Mining Depot Barracks in 2009, two years after it closed its Scorching Bay doors.

Chocolate Fish co-owner John Pennington said looks were not everything.

"It's not too bad. Every building could do with a coat of paint, but we have a lot of activity going on over here," he said.

"We have a great little community. Yes, when you drive through it doesn't look too good, but there are a lot more people here than there were four years ago. The gardens are well- maintained, better than at Massey Memorial, and I think the trust does a good job with the resources it has at the moment."

Mr Pennington said some of the worst buildings had been torn down.

Wellington Port Nicholson Block Settlement Trust chairman Neville Baker said the trust was looking at several options for the site.

"I've only been the chairman for eight weeks, so we are still working through what our options are," he said.

"We are exploring them, and because of the confidential nature of that, I can't go into further details.

"It's a really important piece of real estate and it's incumbent on us to make a decision that's good for the area and for Wellington." 

1839: Part of the Port Nicholson Block sale, in which most of Wellington was sold to the New Zealand Company.

1885: Selected as site for anti-submarine mining base because of a fear that New Zealand - then a British colony - might be attacked by the Russian navy.

1907: Transferred to the navy.

1914: At the start of World War I, munitions stores and a small tramway built near the wharf.

1942: World War II - more stores, slipway and new wharves built along with accommodation, workshops and small hospital.

1946: Transferred to air force and renamed Shelly Bay Air Force Base. Used to accommodate catering unit and up to 300 Wellington staff.

1995: Closed as air force base and put up for disposal - process delayed because of a possible Treaty of Waitangi claim settlement.

2002: Local Government Commission rules reclaimed land at front of base is owned by Wellington City Council.

2008: Iwi agrees to buy it back as part of Treaty settlement deal.

2012: Serious Fraud Office begins an investigation into Port Nicholson Block Settlement Trust chairman Sir Ngatata Love. He steps down from the trust.

2013: Te Atiawa leader Neville Baker elected chairman of the trust.

2014: Developer Ian Cassels applies for a five-year lease of Shelly Bay.