Development plans at the former CH Smith Marine site in Launceston remain in limbo, despite renewed calls from the public to tear the building down.
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The outcry from locals came after police reported a fire was deliberately lit in the building on Friday.
The heritage listed site has been vacant for more than two decades with concerns it has become a “safety risk”.
Launceston Chamber of Commerce executive officer Jan Davis said the property was “crying out for something to be done with it”.
“Apart from the issue of it being an eyesore, there’s the risk it presents to both those who are tempted to squat there and those in the buildings surrounding it,” she said.
Ms Davis said the issues went beyond the building itself.
“It’s a landmark site in Launceston, it’s a gateway site,” she said.
“The chamber would be very interested in a broader conversation with the heritage council about how we can sensitively manage heritage in the context of new developments.
“Having sites around the town that are left undeveloped is such a disappointment, it detracts from the look of this beautiful town.”
In 2015, Launceston City Council granted a second development application to the current owners of the building, Brile.
The DA included an amendment for heritage works to be undertaken prior to the opening of any new retail business.
The $16 million project would include restaurants, a cafe, retail, a childcare centre and parking.
The Geelong property group had originally planned for a $30 million retail development at the site in 2012 which would have seen the building demolished.
However due to an objection from the heritage council, the application was rejected.
In February, Brile financial controller Peter Velt confirmed the developers had locked in three tenants for the site and were continuing to search for more.
"We're still looking to continue to complete the project. Until we are comfortable we won't start building,” he said.
Launceston mayor Albert van Zetten said council was continuing to work with the owners to “ensure there is development at the site”.
“It is a private property, it is in their hands. But I’m very keen to see development there,” he said.
The Examiner is seeking comment from the heritage council.