A fire station based nearby would move in and its former site redeveloped, along with three neighbouring government towers, into convention and exhibition facilities, a hotel and grade A office space, the Fire Services Department said.

The decision to remove the pier facility dating from the Vietnam war is seen by some scholars as an attempt to expunge remnants of Hong Kong’s colonial past and a symbol of American presence in the city, while others argued land shortage was the dominant factor.

Fenwick Pier was closed to ships in 2011 to make way for reclamation works in Victoria Harbour and has since become landlocked.

It was originally built in 1929 on Johnston Road as a private wharf for a steel factory and dockyard owned by a company bearing the same name.

The pier then moved twice as the shoreline of the harbour moved northwards with two rounds of reclamation, and settled at its present location in Fenwick Pier Street in 1970.

It found a new lease of life there when the colonial government granted the 30,000 sq ft site to the non-profit Servicemen’s Guides Association (SGA) for a peppercorn rent of HK$1 a year.

A now-closed McDonald’s selling beer and pizza – as well as shops, money-changing concessions, lounges with typewriters, and an information booth that still exists – were set up to serve sailors.

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SGA said in its brochure that although most military visitors were from the United States, their services were offered at low prices to those from other countries. The site was also open to the public.

The pier was extended in 1993 to become a three-storey arcade, but business has plunged in recent years.

Since the pier was cut off from the new harbourfront, sailors had to land at the China Merchants Wharf in Sheung Wan and travel to the Fenwick arcade by shuttle bus.

“In the past, whenever vessels came to the city, hundreds of sailors would line up outside our store for new suits and uniforms. We had to work days and nights to deliver within five days before they left,” said Tony Wong, a tailor in his late 60s who has witnessed the changes at Fenwick.

“Some of the American sailors still came back whenever they visited Hong Kong, because the place is memorable to them. But the mall is pretty quiet now, as fewer vessels come.”

In 2009, the American and nine other foreign consulates wrote to the government requesting the landing facility was relocated, but to no avail.

Sources said there had been ongoing discussions between lands officials and SGA’s board of directors about the future of the pier in recent years, in which the latter’s hope for a longer lease agreement was met with reservations from the government.

The Development Bureau confirmed to the Post it had decided to terminate the lease and informed SGA last month that it should return the site in about two years, allowing the association “reasonable time to wind down its business”.

“The demand for SGA’s services has not been as strong as before and given the scarcity of land resources, the site should be put to alternative gainful purpose for the long-term development of Hong Kong,” a spokeswoman added. “We do not have any relocation plan for SGA.”

The Post has approached SGA for comment.

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Regular updates of visitor numbers were not available, but when it sought approval for refurbishment in 2012, SGA estimated that 28 vessels with 36,500 sailors came to the city that year.

From 2001 to 2010, the pier received navies from 14 nations, with the number of sailors ranging from 6,200 to 55,000.

International relations scholar Simon Shen Xuhui said Fenwick had served as one of the favourite locations for the US military to stock up on supplies and services during the Vietnam war.

Over time it bore the image of an “American naval base”, he said.

“Inevitably in diplomatic circles, this gesture [of taking back the land] will be interpreted as an attempt to remove both colonial remains and a symbol of American presence in town,” Shen said.

Kenneth Chan Ka-lok, a former Civic Party lawmaker and a scholar in international relations, agreed it was a political decision, saying the pier should not be taken back by the government because it had served as a welcoming centre for visiting vessels around the world.

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Lau Siu-kai, a leading Beijing adviser on Hong Kong affairs, said he believed the government’s decision was based on a shortage of land for offices and other uses.

The city faces a shortfall of 256 hectares of land for economic purposes in the next three decades, according to earlier government estimates.

“To take away a piece of land granted by the colonial government is not wrong. It has been underused and not everyone likes the history of it,” he said.

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Under the plan, Kwong Wan Fire Station would set up its base at the pier with its former site on Harbour Road, next to Immigration Tower and other government buildings, being redeveloped.

A US State Department spokesman said there had been a long track record of successful port visits to Hong Kong, and they expected that to continue. He added the US government did not own or lease space in Fenwick Pier.