Police are investigating the incident.
At a council meeting on Thursday morning, a majority of eight councillors to six voted in favour of the decision.
An investigation into the crash is continuing.
Multiple attempts to raise funds for the church have failed and it will shut next month.
Fishermen have been asked to keep an eye out for it.
About 15 teenagers experienced symptoms of irritated eyes and breathing difficulties.
Emergency services are on site.
"If the boat goes, the community goes with it - if it loses the space, it loses the heart of it."
Sexual assaults in Wellington have increased by nearly 50 percent in the last five years.
