Newcastle council explores grant options for ocean baths restoration

The council announced on Monday that it had "committed to funding the restoration" of the Newcastle and Merewether baths pavilions after it failed to attract viable commercial propositions.

The council called for expressions of interest in 2014 and again late last year to redevelop the site with a restaurant, function rooms and new community amenities.

But a lease limited to 21 years by the Local Government Act proved too big a hurdle for private enterprise to overcome.

The council said it would form a "community reference group" by the end of the month to "guide the restoration" and start "further engagement" on the Merewether pavilion this year.

City of Newcastle director of infrastructure Ken Liddell said he expected a concept plan to be completed this year and construction to start in 2021.

In the lead-up to the 2017 local government elections, lord mayor Nuatali Nelmes committed Labor to spending $3 million on upgrading the baths in the council's next term.

That deadline will have come and gone by the time of the next election in September this year.

Asked whether the council intended to build a restaurant or function centre at the baths, a City of Newcastle spokesperson said the upgrade would be "guided by the results of community engagement and detailed site investigations".

"The cost of the project will be determined through detailed design based on community engagement, the conditions of the existing structures, and the project delivery model chosen," the spokesperson said.

"The city will explore options for potential grant support with state and federal governments."

The proposed Newcastle commercial lease was for 5800 square metres comprising the pavilion, surrounding paved areas and adjoining car park but not the baths themselves.

The City of Newcastle spokesperson said the current scope of the project was "focused on the pavilion and public space around the pools".

The plan to lease the pavilions at Newcastle and Merewether was met with a Save Our Ocean Baths petition which has attracted 14,751 signatures.

A group of Newcastle East business people lodged an application during the expression-of-interest phase for a "Beach, Body and Baths Club" inside a new two-storey building to be subsidised by installing $4-an-hour council parking meters along Shortland Esplanade from Newcastle beach to Nobbys.

But the council said none of the four submitted proposals had progressed beyond an initial panel review.

The community reference group will include representatives of Friends of Newcastle Ocean Baths, Pirates swimming club, local businesses, indigenous groups, Coal River Working Party, Newcastle East Residents Group and the Australian Institute of Architects.