NELSON Bay may suffer the same fate as Newcastle's CBD if too many obstacles are placed in the way of developers, some Port Stephens councillors fear.
A call by Cr Sally Dover at the last council meeting to preserve two viewing corridors through the town to the water sparked a debate over the dangers of restricting development in the centre of town.
"We can't afford to get too worried about high rise building or viewing corridors," Cr Bob Westbury said.
His comments came as the council's head planner, David Broyd, told a public meeting on Saturday that Nelson Bay was almost unsustainable as an economic centre - see story page 5.
"There's been talk of [redeveloping the town] for six years, if we're not careful we will miss the boat...the developers will leave this town with all their money," Cr Westbury said.
"The CBD is languishing, waiting for someone to make a decision.
"If you want Nelson Bay to go broke, okay, knock this on the head."
The debate came before councillors adopted a new set of planning principles for the redevelopment of the town and foreshore precinct.
Cr Westbury said he was in favour of a 10-storey, four-star hotel on the waterfront at the western end of the marina, citing its employment and tourism potential.
"I'm worried about being too restrictive at this stage in the process...we need to have a hard look at what happened in Newcastle," said Cr Nell.