Wollongong City councillors moved to reduce the risk a parcel of land at Coledale was sold before the council could formally acquire it.
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The surprisingly contentious site is a road off Cater Street, known to locals as Hyde Street.
Although it has existed since at least 1875, the road has never been formally recognised by council.
A neighbouring land owner had asked council to recognise the land so that they could buy it.
At Monday night's council meeting Cr Leigh Colacino said residents were concerned that this was the first step in council selling the land to a private person.
"They're not convinced that their voice has been heard," Cr Colacino said.
He also said the information that someone had already approached council about buying the land was really worrying residents and it was "misleading" to include this in the meeting papers.
Cr Mithra Cox said if the council voted in favour of formally declaring the road it may be seen by residents as a precursor to a move to sell the land to a developer.
Cr David Brown said there was a "legal tangle" in terms of the ownership of the land and suggested council should move quickly because it appeared someone may have already started "doing the untangling".
After discovering the process of gazetting a road would take around a week to begin, Cr Brown suggested that person may even be able to buy the land before council has the chance to formalise the road reserve.
Cr Janice Kershaw acknowledged the fear the residents had that the land may be sold.
"We have no intention of selling this property," Cr Kershaw said.
"It has been brought to our attention as the land is not in council's name and it's crucial it gets in council's name as soon as possible. There's nothing here at all to say we're selling it."
All but Cr Cox - who wanted the vote deferred to allow for public comment - voted to recognise the road and provide neighbouring residents with details of the decision that was reached.