They argue the scale of works proposed in the latest 2030 strategy for the foreshore will spell the end for the town's existing commercial area.

The group is lobbying Port Stephens Council to drop the five storey plan on the foreshore and in the park before the strategy goes on exhibtion which is expected next month. Magnus Group member Geoff Washington said the deletion was needed to ensure the survival of the town's centre.

"If you load the foreshore with massive development it is really just a nail in the coffin for the CBD," Mr Washington said.

"The waterfront should be left open and protected as most other waterfronts in other places are.

"People come here for the water and the views, they don't come to see a five-storey block of cement that cuts off the foreshore from everything else."

Another resident Beverley Henry said that it did not make sense to pursue a development that would draw people away from the business district towards the water.

"The whole idea was to have people go back into the CBD," Ms Henry said.

"That just won't happen if you start building on the water."

Mr Washington said while the proposal had its merits, he felt there were other options to be explored for the reserve off Victoria Parade.

He said any development there would significantly decrease the value of property in Magnus Street.

"There are a lot of residents here that would be happy to volunteer to maintain this reserve,"Mr Washington said.

"People have invested a lot of money into property here and when they did that, most of them checked with council and the department of lands to make sure that this land was classed as a reserve."