A former pill factory in the Southern Highlands will be transformed into a boutique hotel that's intended to be a "food and wine hub".
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The Victorian sandstone building The Pill Factory was built between 1896 and 1898 on Anzac Parade, Bundanoon.
However, current owners, Sydney's Brent Marvin and Claudia Araya-Marvin, said the heritage-listed site had been in a state of disrepair when they bought it in 2014.
"I saw it and thought, 'wow, what an amazing building', but it was pretty derelict," he said.
The property was bought and its frontage was stripped back and restored to its original look.
"We renovated it, and upgraded it really," Mr Marvin, a director of MD+A Architects, said.
Mr Marvin and Ms Araya-Marvin have been operating The Pill Factory as group accommodation, sleeping 36 people, with 14 bedrooms and five bathrooms.
"At the moment, we just let it out as group accommodation," he said.
"We're not a function centre, but it can be a space for people to host their own private functions.
"It's really just like a big guest house or a holiday home."
However, they have significant plans for its future - a development application for a 12-room boutique hotel conversion was recently approved.
This will include refurbished hotel rooms with en suites, and permission for a restaurant and a small bar.
"We're just progressing to the next level - more active food and beverage, than just passive accommodation," Mr Marvin said.
He said the accommodation was booked out almost every weekend, with some regulars booking a year in advance.
"At the moment you've got people coming down, and you've got 50th birthdays, weddings, groups of friends and families, and it's like a big house that people enjoy," he said. "But the mid-weeks are quiet, that mid-week economy in the Southern Highlands.
"Bundanoon is growing in terms of being a bit of a foodie hub, with new cafes popping up and other venues under new management. The food offering has been rising, and we want to support that and continue that trend.
"There's some great wineries, and a lot of people out there producing some really good meat, cheese and butchers' goods.
"We want to focus on and support those local suppliers.
"What we're looking to do is create a bit of a food and wine hub, and be an events-driven venue."
Mr Marvin said they didn't plan to close down the venue for the transformation to be completed, but would undertake the work over time.
The building was known as the 'Golden Cross' pill factory during its early years, producing various mixtures and ointments.
It was owned and operated by Welsh-born homeopath and vet William 'Gus' Nicholas.
He died in 1921 and in 1930, the two-storey factory was converted into the three-storey Bundanoon Guest House.
In about 1970, it changed again into the 'The Old Heidelberg Gast Hof Restaurant and Hotel'.