The Maitland-Newcastle Diocese has come under fire for selling the former Empire Hotel site where they had planned to construct affordable housing.
Diocese Vice Chancellor Administration, Sean Scanlon, says a 'frenzy of activity' within the local building industry has raised construction costs, and building affordable housing on the Hunter Street site became infeasible.
Labor Deputy Lord Mayor Declan Clausen has accused the Church of 'land-banking' by selling the property after receiving approval to build in December, but Mr Scanlon denied the accusation.
He says the decision to sell came down to struggles with cost constraints and a lack of support.
"It needs to be viable to be affordable to the ultimate recipients of that housing, and that made it extremely difficult for this to work."
The Church was successful in having infrastructure provision fees discounted due to the affordable housing component of the project, but extra financial help was denied by the Hunter Development Corporation and Newcastle City Council.
"We didn't look to sell this, necessarily," explained Mr Scanlon. "Without us prompting, the builders then approached us to see whether we would be willing to sell the property to them,"
"It seemed like a sensible thing for us to do."
The Catholic Church received a $5.5 million profit from the sale, which Mr Scanlon says will ultimately be put towards funding more positive activities in the community.
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| The Former Empire Hotel site on Hunter Street. Picture: theherald.com.au |
