Plans for a $3 million surf club at Wollongong City Beach were due to be shown to city councillors in a matter of days.
Council officers had chosen the Kollaras Group's proposal, which was one of two expressions of interest to replace the dilapidated clubhouse building.
The two-storey design would include a restaurant-oyster bar at the northern end and a cafe-kiosk at the other end with a large function room in the centre.
The lower level would include meeting rooms, a gymnasium, public hall, change rooms and surf boat storage area.
The council's assistant property division manager Wayne Douglass said it was "a tremendous proposal" and added that the surf club would be built at no cost to the council.
This was because, in return for constructing the building, the developer would be given a long-term lease for the building's commercial component.
Approval would be given in 1999 but construction did not begin until 2002, by which time the costs had increased to $5 million.
Sign up for our newsletter to stay up to date.