An ambitious plan to restore Newcastle's historic post office has taken a step forward with the approval of a $3.7 million development application for the project.
The restoration, which will see the 1903 building returned to its former glory, will involve the creation of an indigenous cultural centre, a conference facility as well as retail outlets.
Work to date has mostly involved the painstaking removal of tonnes of asbestos from throughout the building.
The cost estimate of the main project rose sharply following a government heritage assessment of the building last year.
COVID-19 has also added to the delay.
The building's owner Jerry Schwartz said construction on the main project would begin as soon as a construction certificate was issued.
"We now have to seek a construction certificate and that process needs to include detailed building plans and engineering details," Dr Schwartz said on Friday.
"What will be imperative is that council expedites their consideration of the Construction Certificate application in a timely manner, as nothing can proceed further until that is finalised."
Dr Schwartz, who does not plan to turn an immediate profit from the post office venture, bought the building from the Awabakal Aboriginal Land Council in mid-2018 for $3.5 million.
His bid was among 11 expressions of interest that were lodged from hospitality and educational organisations.
Dr Schwartz said his first priority was the conversion of the basement area into an Aboriginal cultural centre for the local Awabakal people.
The next step will be the creation of a function centre on the first floor that will attract conferences and banquets the city.
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The building's colonnade area will house boutique shops related to the wedding industry as well as a coffee shop.
"Restoring such an iconic property will be complex, but I have always stated my passion for the project, because I have a long personal history associated with Newcastle, having been a medical student here and then a major investor in the city," Dr Schwartz said.
"I believe Newcastle has enormous tourism and business potential, so it is essential that we make the most of the city's prime assets.
"The best way of preserving heritage is by sympathetically using the property. Rather than being a run-down shell, closed off to the community, our restoration plans will see the community totally involved."
Dr Schwartz said he hoped the new venture would help create enhanced transport links between Sydney, Newcastle and the Hunter Valley.
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