Shellharbour City Council will forge ahead with its controversial City Hub development after adopting the business case for the $55 million project.
The new community and civic centre divided councillors at Tuesday's council meeting, triggering a debate over whether the city could afford to fund the project.
The council eventually voted 4-2 to move ahead with the ambitious College Avenue development, which will now be scrutinised through a NSW Treasury review process.
Mayor Marianne Saliba yesterday rejected suggestions that the council had bitten off more than it could chew.
"I believe that what we're proposing is a modest city hub, at the same time meeting the needs of the community," she said.
"I believe that we've thoroughly investigated what is required and that we've done our homework to ensure that financially we will be able to meet the repayments."
Located in the city centre close to Stockland Shellharbour, the hub would include a library, museum, auditorium, meeting rooms, council chambers and new administrative offices.
The council plans to borrow $16 million to help fund the project.
It also hopes to generate $34 million from the sale of assets, including the old Warilla council building, the Lamerton House council building and adjacent land, the council's holdings at Tullimbar, and two vacant lots near the Oak Flats railway station.
Funding from land sales has been a key issue in the debate over the detailed business case.
Councillor Peter Moran argued the council would face a funding shortfall if the land sales did not meet expectations.
"My concerns are with the lack of financial clarity around the proposal and the social impacts on our villages," he said.
However, others argued there was a degree of risk in any development and that land prices could exceed valuations.
"While you sit waiting and thinking and debating, the higher the costs are to actually build these facilities," Cr Saliba said.
"As a council we will endeavour to sell our parcels of land and our properties at the appropriate time to maximise our return."
If the council did not proceed, it would still face significant costs to maintain and update existing facilities, she said.
Deputy Mayor Paul Rankin said the City Hub would cater to a growing city.
"If we don't get the price that we want for the land then it doesn't go ahead, it's as simple as that," he said.
Former mayor Kellie Marsh and Cr Moran opposed the plan.
"I think asset management should have been a priority instead of a new hub," Cr Marsh said.