Newcastle restaurateur Peter James plans to transform the inner-city Blue Door cafe into a landmark eatery after he buys the building from Newcastle council.
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Councillors voted unanimously on Tuesday to sell three adjoining sites, including the heritage-listed Fred Ash building, for almost $10 million. The proceeds will fund upgrades to the Newcastle Ocean Baths pools.
The council will sell the Clarendon Hotel and Fred Ash buildings to major regional property developer Stevens Group and long-time Clarendon Hotel business owner Russell Raymond for $7.485 million.
A jubilant Mr James will buy the neighbouring Bennett and Wood building, which houses the Blue Door cafe, for $2.015 million.
Mr James has rented the building for 15 years, first as Juicy Beans then as Blue Door, but has wanted to buy it since moving in.
"I've just got over the tears of joy of reaching my goal," he said. "I just love that location. I just know there's growth in that area. I had the vision from day one of what I could potentially do to that spot, and I do see good things happening."
He said he visualised the popular cafe, which opens onto Wheeler Place, transforming into "one of the better restaurants in Newcastle".
It will be sandwiched between what could be new tourist accommodation in the Fred Ash building and Syrian billionaire Ghassan Aboud's 135-room, five-star Kingsley hotel under construction in the former City Administration Centre "Roundhouse" building.
"I'm excited about bringing something to Newcastle it hasn't got," Mr James said.
Stevens Group owner John Stevens said he and Mr Raymond had bought the other two buildings primarily to secure the Clarendon.
"The whole idea is we took the Clarendon from a leasehold to a freehold then guaranteed its future," he said.
"Council ... wanted us to buy both properties at once, and on that basis the Clarendon was a 23-year lease to go.
"As the owners you can look at the opportunity of spending some money on the hotel and upgrading it."
The council said last week that the Fred Ash would likely become tourism accommodation.
Mr Stevens said he had not appointed an architect yet but hoped to have a plan in the "coming months".
The council was using the Fred Ash building to house office staff before moving to Newcastle West last year. It sold the nearby City Administration Centre for $16.5 million to Mr Aboud last year.
The 1855 Fred Ash building is listed on the State Heritage Register, and the council said the new owners would be "restricted to conservation principles" in any redevelopment.
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