The formation of the Makers and Traders of Newcastle City group comes after a recent survey showing that trade in Darby Street alone has fallen by 30 per cent amid the light rail construction and ongoing development projects in the city.

The group, which has 50 members and is growing rapidly, is conducting a city-wide survey to take its case to Newcastle City Council and landlords to argue for a drop in rates and "hyper inflated" rent respectively.

"We want to not only have a voice at the table (to help frame policy) but to also take control back into our own hands," a statement of intent from the group reads.

Makers and Traders has been formed by veteran city business owners including Tim McPhee (Abicus, Scout), Chris Johnston (Good Brother, Suspension), Bec Bowie (Estabar), Angela Hailey (Studio Melt), Rowena Foong (High Tea With Mrs Woo) and Bronwyn Rundle (Rundle Tailors).

Mr McPhee was spurred into action after he conducted a survey of Darby Street shop owners over two years to April this year. It found:

"The number of businesses that we have lost in the last six months is absolutely unheard of my 20 years in Darby Street," he said.

"It is unnerving how many people are being affected, it's not just retail - it's food and coffee shops - and many are reducing their opening hours."

Mr McPhee aims to complete the city-wide business survey by the end of August before taking the results to relevant authorities to argue for financial reprieve.

He said city commercial rates and rents were based on Newcastle being an "it" spot despite the fact there had been a slump in foot traffic and trade.

"We hope to get some rates and rental reform not just a token, "Here's $500 off rent, as council has done. That's great but in reality that money is not even one day's rent for our business," he said.

He said a "significant" annual reduction in rent would have a profound impact on the city's independent traders.

"Rent is our biggest challenge, it is based on the CBD thriving and it isn't," he said.

"We believe it will be soon, but for now everyone needs to be elastic and prepared to approach their business in different ways, and if landlords are looking to the future they need to be open to directly working with their tenants."

READ MORE: Business compensation runs off the rails

Newcastle Makers and Traders will encourage businesses to take the data to their landlords to negotiate, "because no one wants a vacant space, the space rented for less is better than a vacant shop."

Mr McPhee said city businesses had struggled in the past two years due to a combination of a national downturn in bricks and mortar retail, the light rail build and a misplaced public belief that there was a lack of city parking. Construction sites had also brought changes in the movement patterns of residents.

He said the new group was not interested in pointing fingers or getting bogged down in the politics of the past - including the recent funding spat between council and now defunct business improvement association Newcastle Now.

Rather, its aim is to unify the makers and traders of Newcastle in order to boost visitors to the city, develop events and grow awareness of "the experiences that make the city a significant cultural destination."

The group's plans to draw more people to the city include:

* Creating maps and guides of the Newcastle makers and traders community for locals and tourists

* Regular cross-city activities and collaborations with walking trails and curated events

Mr McPhee said the businesses represented the "character, brand and DNA" of Newcastle and recognised the changes and challenges afoot.

"Our city is undergoing a period of transition and transformation, and we are being affected by many forces that we cannot tackle independently or as individuals," he said.

"We feel that our contribution to the cultural fabric, energy and identity of our city is not being valued or recognised by the planners and developers of the city so we have come together on this common ground to connect and represent ourselves."

"By having the most successful and independent business operators in the city with the same vision and goal we believe we can inspire positive change and ultimately create a sustainable business community that embraces the circular economy and our inherent creativity."

Mr McPhee said there were "inspiring" city businesses but "we are at risk of them being lost unless we do something."

Rowena Foong, who with sisters Angela and Jules founded sustainable fashion label High Tea with Mrs Woo in 2004 and has traded on Darby Street since, said the new group had come together to motivate people from surrounding areas to come into town, and keep local residents engaged and supporting local business.

"There is an influx of tourism with so many eyes on Newcastle at the moment who are enjoying our beaches and walks but they're at a loss to discover interesting businesses and events," she said. "They want to know where the locals go and what the locals do. Who better to ask than the makers and traders that love, live and work here - us."

Ms Foong said factors ranging from two elections in the first half of the year, economic slowdown, global campaigns on energy, plastic and pollution had impacted consumer spending habits.

"So many fears are impacting business and life at the moment. For us in Newcastle, we are definitely feeling the effects of all the development and construction that is happening and will continue to roll out over the next five or more years. It's a tricky time for everyone," she said.

As the traditional model of retail changed with consumer habits, she said High Tea with Mrs Woo was evolving to engage with customers on new levels, including its Slow Wearing Well walking trail and participating in top interstate design markets.

The formation of Makers and Traders comes as City of Newcastle confirmed with the Newcastle Herald that businesses, not for profit organisations and community groups can apply for $900,000 in funding collected from a special rate imposed on commercial businesses in the city and parts of Hamilton, Wallsend and New Lambton.

Previously, money raised through the special rate went to business chambers operating in commercial precincts. However, council adopted a new model in May after deciding that business improvement associations in Newcastle, Mayfield, Hamilton and Wallsend should receive no more than $100,000 annually.

Council says it is now negotiating with BIAs in Newcastle, Mayfield, Hamilton in view of entering 12-month "service agreements".

READ MORE: Business improvement associations oppose council funding plan

Mr McPhee said Makers and Traders was working on applications to win funding, with council confirming up to $500,000 is up for grabs for a single project in the city, or smaller $15,000 grants elsewhere.

"We've a long list of amazing ideas, we want to do this right and I believe we'll get access to the money because we represent the city-wide business community, we can get in there and kick some arse quickly," Mr McPhee said.

Bec Bowie, who opened Estabar 15 years ago, said council staff had told her in the past that "cities evolve, not everyone makes it".

"There is a lack of real value for what small local independent businesses contribute to our city," she said.

"I'd like to see the businesses and the people who have invested their creativity and passion and often their life's work in their cities and communities really succeed and really be valued by the movers and shakers and recognised for what we are."

Ms Bowie said business, council and the community needed to "start from the ground up".

"We just want a seat at the table, if we can get our voice together and have a strong statement about what we are about, our intentions and what we can do for the city, if the leadership can understand how we can help them and they can help us, everyone would win," she said.

Mr McPhee said Makers and Traders was focused on telling the authentic stories of the city and celebrating its creative talent.

"There is a lot of power in a united voice and we really want to inspire positive change in the right way and we feel we have such a very real understanding of what is happening on ground level," he said.

"We are all experienced and proactive and we want to tell the story of the makers and traders and celebrate the walking culture of the city and proximity to the sea.

"Sure there are beaches and beautiful buildings but it's the conversations and engagement with our peninsula city's makers and traders in their retail spaces, the locals' insight and the spontaneous inner-city discoveries that make a visit to Newcastle so much more significant.

"There is so much to celebrate and champion that isn't being done and we believe the independent businesses are the jewels in the crown of the city and what makes a visit memorable.

"It's a super critical time and we want to turn it around."