Located on the Princes Hwy, south of the Bulli township, the 121-year-old building was bought by Bulli-based roofer Frank Gervais in 1989 for $125,000.

In 2003 Mr Gervais received council consent to restore the ageing building and turn it into a boutique hotel and restaurant but in 2005 that approval expired because the only maintenance and structural work done on the building in those two years was not technically related to the development application and was negotiated separately with council.

According to council heritage officer Joel Thompson, council had a policy for development applications to lapse if related building works did not commence within two years of consent.

"Although there was maintenance and conservation work done, it wasn't technically work that was tied to the development application with the result that the DA lapsed two years after the date of consent because that was the standard time frame on DAs at that time," Mr Thompson said.

" Now we are looking at ways to revive that consent given that work was commenced, but we are still looking into the details of that, it is a bit of a legal issue."

When the Mercury visited the site last week they found vandals had smashed windows and left graffiti signatures, paint was peeling in clumps from the exterior, the inside rooms were decrepit and the rear stables had collapsed and were rotting into the ground.

Mr Gervais said that no work could be done on the property until the development issues with council were resolved but said the 121-year-old stables "fell down years ago".

"The developer next door put his bulldozer through the side of them, but anyway, that is in the past," Mr Gervais said. "I can't help vandals knocking out all the windows and when they do that it costs over $1000 to repair.

Despite being nominated for the NSW Heritage Register the building wasn't listed because it does not meet the criteria of being significant to the state.

It is listed as a regional heritage item on the Wollongong Local Environmental Plan 1990 and will soon be downgraded to a local heritage item as the NSW Department of Planning and the Heritage Office have instructed local councils across the state that regional listings will no longer be recognised.

It is listed by the National Trust but this provides no protection, merely status.

Yesterday Cr Wood that the building was in a better state than it was five years ago.

"He (Mr Gervais) has secured the building from a structural point of view and it looks a lot better inside than outside," Cr Wood said.