Lake Macquarie council has approved the sale of dozens of lots it owns in an historic paper subdivision in the southern reaches of the city.
The council voted to offload 54 lots and a number of unformed public roads in the mostly undeveloped Ramsgate Estate at Wyee Point during its ordinary meeting earlier this week.
The estate's origins date back to 1885 and it contains 608 lots with an average size of 400 square metres.
In total, the land sales will raise $858,000, which the council will contribute to its strategic property reserve.
The council's land will be purchased by FTLR Pty Ltd, which is the majority landowner within the estate and the proponent of a development scheme to rezone and re-subdivide part of the area.
The council's landholdings are not consolidated and are unsuitable for stand-alone development.
The sale to FTLR, which already owns 375 lots, represents the best opportunity for the ultimate supply of residential lots to the market, the council said.
In 2014, the council approved the sale of all 145 lots it owns to FTLR via a two-year option agreement, but the company failed to exercise the option.
The latest sale is the result of a revised development proposal, which involves FTLR consolidating all of its landholdings into two mega-lots, currently zoned low-density residential and environmental living, to then re-subdivide.
"Without consolidation of the lots, development of Ramsgate Estate will not occur," council staff said in a report prepared for the meeting.
"It is therefore considered that the sale to FTLR will provide the best opportunity for this to occur and the redevelopment of the estate to be achieved.
"If successful, FTLR's development [of] Ramsgate Estate .... will rectify a long-term planning and landownership issue, that will result in social and economic benefits to the city."