REALTOR Alan Halliwell says the $5.5 million redevelopment of the Devonport Surf Life Saving Club was a business mistake by the Devonport City Council.
More than two years of negotiations have failed to lock in a deal to fill the upstairs 100-seat restaurant space in the Mersey Bluff Precinct complex, even though it has commanding views of Bass Strait on prime real estate.
That space, in a redevelopment funded by ratepayers and the state government, has become a white elephant for the council.
Last week it became the catalyst for a no-confidence vote in Devonport Mayor Steve Martin.
Devonport realtor Mr Halliwell said he believed the council made a wrong business decision over the entire development.
``To be honest, a private developer would not have done the development in the first place,'' Mr Halliwell said.
``Because of the costs involved in creating the property, it would be very hard to get a commercial return on that property that would be seen as profitable.
``That is the way I have looked at it, and what other developers have said about it as well.''
Mr Halliwell said he estimated the space could be worth up to $40,000 a year in rent.
He recommended concessions on this figure would need to be made, or rent-free periods offered as a take-up incentive.
``It is my opinion that the council should be aiming to get someone in there, rather than trying to get a premium rent in this market,'' Mr Halliwell said.
``If you leave it vacant long enough, people will lose confidence in the project [and] that would also possibly affect the businesses that are already there.
``It is really disappointing because I think it has the potential to not be a stuff-up - it is just that it is empty.''
Devonport Chamber of Commerce chairman Steven Bramich said the empty space represented lost potential for the business community in Devonport.
``From a business point of view, rent is obviously a problem, but some rent would be better than none,'' Mr Bramich said.
``To a small degree I would have to say yes [it has affected business confidence].
``People would like to see it filled and used, and that in turn would have a flow-on effect for the city.
The Devonport City Council will not discuss occupancy of the restaurant and function space.
Council assistant general manager Matthew Atkins would not say how much ratepayer money had been spent on failed contractual negotiations, or how much had been lost in potential rent revenue for the building.
Prospective tenancy negotiations with Wild Cafe Restaurant owners Jacqui Leary and David Aitken failed after months of discussions last year, with Big Apple owner Nigel Squibb also having his application rejected last year.
Mr Atkins said the council would make no public comment on the tenancy matter until an agreement was finalised.