I can finally mention what I've known about unofficially for a while: it's been publicly announced that New Zealand Memorial Park will be built in front of the old Museum on Buckle St. It's not quite what I originally speculated about when demolition of the service station first started, since it will be where Buckle St is now rather than on the north side of it, and there's an additional nice touch in that the "Greening the Quays" project will be extended up Taranaki St to the park.
There are a few weird things, however, and all are related to the bypass. First, since one of the purposes of the bypass was to ensure that traffic goes in a nice straight line, rather than having to twist and turn, isn't it a bit strange to realign Buckle St so that it will now presumably have to take a sharp dog-leg to match up with Arthur St? It also seems a bit of a waste to have just repaved the northern edge of Buckle St as a pedestrian and bicycle path, only to dig it up again. And what about this quote from the Mayor: "we are honoured to have such a poignant memorial in the middle of our city"? If it's a "bypass", then by definition it should bypass the central city. But this park will be on the side of the "bypass" that's away from the city, meaning that either this park won't be in the middle of the city, or that the "bypass" is a huge misnomer since it's actually ripped through the "city" rather than going around it.