Port Stephens MP Kate Washington says the public will be kept informed of any developments in the use of Tomaree Lodge.
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Ms Washington said the NSW Government was undertaking an additional assessment to determine the physical, ecological and heritage constraints of the site, because "the former government's community consultation process did not take these critical aspects into account".
"I believe meaningful community consultation is key to achieving the best possible outcome for this special site," she said.
"That's why I've committed to publicly releasing all reports and assessments, and working closely with all local stakeholders, prior to any decision being made by the government ."
Ms Washington's comments came as the Tomaree Headland and Heritage Group pressed for action on establishing a new use for the site which has been vacant for the past two years.
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In a submission to be sent to Ms Washington the group said it had "strong concerns relating to site risks/vulnerability as well as to current, extremely high security and maintenance costs".
The submission states:
. That consideration be given to allowing progressive occupancy, which will demonstrate that the government is committed to moving forward as quickly as possible.
. Selected community organisations should be allowed to have access to the site buildings and also the Conservation Management Plan.
. Onsite commercial activity such as a museum, ecology centre, educational facility, visitor information service or café that will not compromise the integrity of long-term planning for the site.
Tomaree Headland and Heritage Group president Peter Clough said it was estimated that maintenance and security was costing close to $1 million a year and that there was a high risk to squatter occupation, fires and vandalism, particularly graffiti if the site remained unoccupied.
"The government continues to provide a commitment to transition the site to Port Stephens for community use, which we fully support.
"The community is seeking direction and action for the site's transition to the Port Stephens community."
Ms Washington said she and her office had briefed Mr Clough numerous times on the progress of the Tomaree Lodge site.
"The Parliament was also updated in August," she said.