Newcastle council staff have recommended approving a $3 million renovation of the Beach Hotel, despite objections from hundreds of Merewether residents.
High-profile Sydney hotelier Andrew Lazarus, who owns Shoal Bay Country Club and The Exchange at Hamilton, bought the landmark Frederick Street pub in 2019 and launched plans for a new upstairs terrace overlooking the beach and upstairs live music venue.
The hotel is allowed to stay open until 3am from Monday to Saturday under the terms of its liquor licence but has traditionally closed much earlier.
Mr Lazarus intends to keep the hotel open until 3am, prompting concern from residents that the venue will morph into a "nightclub".
The development application attracted 145 public submissions, including letters of concern from the nearby Holy Family Catholic primary school and Merewether Community Group.
The development was also the subject of a council public voice session in April 2020.
City of Newcastle staff will present a report to councillors at Tuesday night's development applications committee meeting recommending they approve the project.
The report says the pub's capacity under its existing development approval is 1500 patrons, which will fall to 1230 under the new proposal, though the upstairs capacity will grow from 180 to 440.
It notes that police and the council's licensed premises reference group have not objected to the development application because the capacity and licensed hours of trade are not increasing.
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