There's concern about what will happen to Rotorua's tourist strip

The Government's bought a motel on Fenton Street, close to the centre of town, which is lined with hotels and motels.

It paid more than eight million dollars for it, saying that's in line with an independent market valuation - although some local real estate agents say it's only worth half that.

Hennessy's Irish Bar Rotorua owner, Reg Hennessy, says it's part of a tourist area and once it's lost, it's gone forever.

He says the Government promised to build houses, but it's just buying motels.