The new owners of the former King Edward Park Bowling Club site have opened the door to the future development of the picturesque slice of coastline.
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Awabakal Local Aboriginal Land Council was granted ownership of the 0.6 hectare parcel of land last year as part of a land claim.
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But the site, which forms part of King Edward Park, is also the subject of application to have it added to the state's heritage register. If granted the heritage classification would restrict any development on the land.
Awabakal chief executive Robert Russell briefed the NSW Heritage Council's Aboriginal Cultural Heritage Committee last week about why the land council wanted the site excised from the heritage application.
"The principle of the Land Rights Act is to return land to Aboriginal communities for their spiritual, social, cultural and economic benefit," he said.
"To have the land classified as heritage would be a significant impediment to achieving that goal."
Mr Russell stressed the group did not have specific plans to develop the site, however, it wanted the option to do so in the future.
A 2015 NSW Land and Environment Court ruling crushed a proposal by developer Keith Stronach to build a function centre on the site.
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The court ruled in favour of the Friends of King Edward Park group, which argued the proposal was not permissible on a Crown Land site zoned for public recreation.
Part of the fallout from the six-year court battle was an amendment to the site's Local Environment Plan to prohibit a function being built there.
It remains unclear whether the abolition of the former Office of Environment and Heritage will affect the assessment of heritage listing application.
Most of Office of Environment and Heritage's functions have been absorbed by the new Planning and Industry cluster headed by Planning Minister Rob Stokes, a former environment minister.
A government spokeswoman said the Heritage Council through the Aboriginal Cultural Heritage Advisory Committee was consulting about the requested changes to the listing.
"Matters being considered include the impacts of the changes to the heritage significance, including the Aboriginal cultural significance of King Edward Headland Reserve on its own and in relation to the whole of Newcastle Recreation Reserve," she said.
Friends of King Edward Park spokesman Kim Ostinga said it was significant that the site was not returned to the park when the bowling club was declared bankrupt in 2005 but rather dedicated under the Crown Land Act for public recreation.
"This meant, under the law, the land was to be accessible to the public as its right and not to be used for commercial purposes," he said.
He said the 2015 Land and Environment Court judgement supported the group's attempts to save a public park of historic importance and enforce public law obligations on the council and the minister.
"It is disappointing to think that after all the public effort, the constraints on commercial development, either now or in the distant future, should be lifted by the exclusion of the King Edward Headland Reserve from the Newcastle Heritage Reserve that was given to all the people so long ago," Dr Ostinga said.
Newcastle MP Tim Crakanthorp, asked four parliamentary questions in 2018 about the progress of the heritage listing application.
Each question was met with a short bureaucratic response advising the matter remained under consideration.
Former Parliamentary Secretary for the Hunter Scot MacDonald wrote to Mr Crakanthorp in late 2018 to advise further consultation was needed with the Awabakal group before a determination could be made about whether to list the site on the state's heritage register.
Mr Crakanthorp said the government's handling of the application was disgraceful.
"I believe that the whole site has enormous heritage significance to the city," he said.
"The government has an abysmal record on heritage. That has been demonstrated by the recent disbanding of the Department of Environment and Heritage. This government has been sitting on this decision for at least half a year as demonstrated by the September correspondence."