Hunter and Central Coast Development Corporation says it has "no current plans" to demolish the former Wickham School of Arts building.
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Recent earthworks on land adjacent to the site have raised concerns about the future of the heritage building.
The 1882 structure is one of three old buildings on a mostly disused parcel of land that will ultimately be redeveloped in some form as part of the area's revitalisation.
It has links to writer and poet Henry Lawson, who frequented the school during his time in the city, and is an item of local significance on the heritage register.
In 2014, the then-named Hunter Development Corporation, which bought the building in 2008 from Newcastle council, refuted claims it was letting it wither away.
Then CEO Bob Hawes said the building was being assessed and one option was "to seek development approval to demolish it".
But the site remains fenced off and the building's future is still unclear.
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A HCCDC spokesperson said earth-moving equipment in the vicinity of the building was there for part of its $55 million Honeysuckle works project.
"HCCDC is undertaking significant infrastructure works to improve connectivity into the city and prepare the west end of Honeysuckle for its future use and function," the spokesperson said.
"Work is well underway to straighten Honeysuckle Drive.
"We're constructing a new bridge at Cottage Creek and naturalising the existing channel while the works around [the creek] decrease the risk of future flooding.
"Part of these works include relocation of services in the area adjacent to the former [school], which is why you have noticed machinery in that vicinity.
"HCCDC has no current plans to demolish the former Wickham School of Arts building."
Only two sections of land in Honeysuckle's west remain under HCCDC's ownership after the sale of multiple lots in recent years.
They include a parcel of waterfront land previously estimated to be 20,000 square metres in size between Cottage Creek and Tree of Knowledge Park.
The other section is land bordered by Honeysuckle Drive, Hannell Street, Cottage Creek and the tram depot, which includes the former school and has mixed land uses with part of the site offering a maximum building height of 90 metres.
HCCDC would not say whether the land would be split up to ensure the school remains in public hands or sold in the future for development as one lot.
"The vacant parcels of land remaining in Honeysuckle are earmarked for future development to bring more jobs, homes and vibrant community spaces into the emerging CBD and beautiful waterfront location," the spokesperson said.