After mediation over a planned Southern Cross Community Housing development in Worrigee collapsed yesterday, the organisation’s chief executive officer Marg Kaszo said about $8 million in funding was about to be taken away and given to projects in other areas.

Just last week it seemed a deal in the dispute between Worrigee residents, Shoalhaven City Council and SCCH appeared likely at a Land and Environment Court mediation meeting yesterday.

However, things changed when councillors voted on Tuesday night to offer a land swap or buy back the block of land bound by Golden Grove, Worrigee and Greenwell Point roads.

Council wanted legal proceedings adjourned to allow for negotiations on the future of the development, however the mediation collapsed when both council suggestions were rejected by Ms Kaszo.

She explained funding provided for the development as part of the federal government’s stimulus package stipulated the homes had to be built and occupied by June 30, 2011, so time was of the essence.

“If council was serious about buying back the block or a land swap, why not come to us 12 months ago when there was time to consider it?” Ms Kaszo asked.

“We would have considered it if it was made within a time frame that was possible, but at this late stage we’re not in a position to even consider it.”

Ms Kaszo said she had a “full expectation” the dispute would have been resolved yesterday, allowing her organisation to go ahead and build a mixture of one and two-bedroom homes “for 36 desperate families – that’s what the Shoalhaven will be missing out on”.

Council was even due to issue conditions of consent on Friday afternoon, however everything changed on Tuesday night when councillors bowed to public pressure in an effort to stop the development taking place on the block that for many years had been earmarked as a public reserve.

The issue is now to be determined by the Land and Environment Court, but Ms Kaszo said unless the hearing was expedited there would be no chance of the organisation meeting the timeframes enforced in its agreement with the state and federal governments.

State Member for South Coast, Shelley Hancock, and federal Member for Gilmore, Joanna Gash, both promised to lobby the governments to try to extend the funding timeframe, hopefully to enable a land swap to go ahead.

“We all know more community housing is desperately needed, but we know this is not the appropriate site,” Mrs Hancock told a gathering at the development site on Thursday morning.

Golden Grove resident Terry Earle agreed.

“We want community housing, we just want it in a place that is more suitable.

“We don’t want Southern Cross Community Housing to lose the funding.”

During Tuesday night’s council meeting deputy mayor Gareth Ward caused a stir when he called for discussions on the issue, which had previously been held in confidential committee, to be brought to the floor of the full council meeting, in front of the gallery full of concerned Worrigee residents.

While the call led to the meeting being adjourned for legal advice, it resulted in councillors voting overwhelmingly to try to buy back the land, offer a land swap, or proceed to a court hearing.