THE historic former Newcastle Post Office is set to go under the hammer after years of neglect.
The landmark city building has been listed with Sydney-based real estate company Professionals Newtown and will be auctioned at Sydney's Grace Hotel on May 13, unless it is sold before.
Professionals principal Steve Kremisis said he had already received expressions of interest, but refused to elaborate.
"There is someone looking at buying it, we've had interest," Mr Kremisis told The Herald yesterday.
Newcastle Lord Mayor John Tate said it was "unlikely" the council would make a bid but said he would support a joint bid with state and federal governments.
"It's one of those buildings that is going to be very expensive to bring up to standard," Cr Tate said.
"Council has got enough buildings to look after, particularly City Hall, why would be buy another? It's ratepayers' money we would be spending on the thing."
Newcastle MP Jodi McKay said "any decision to purchase the building would be based on ensuring the best outcome for the community and future of the post office".
Sydney developer Sean Ngu bought the heritage listed property from the Federal Government in 2002 for about $2 million.
The building has lain derelict for years and has long been a haven for squatters and vandals.
Earlier this year, Mr Ngu denied rumours the building was for sale, saying he planned to redevelop it into an upmarket nightspot, complete with a lounge and reception centre on the top floor, a ground-level pub and a bar in the basement.
He was granted development approval in October last year to convert the post office into a pub or function centre and was given a Hoteliers License to operate 15 poker machines from the site.
Advertising for the post office auction describes it as an "iconic landmark", complete with "high ornate ceilings and marble columns".
Fix Our City spokesman and developer Jeff McCloy said he would not be interested in bidding because of the state of Newcastle's central business district.
"The state of the city, the intransigence of the State Government on the rail line, has stopped me doing things like that, so I won't," he said.
Hunter developer Hilton Grugeon said he also would not make an offer and anyone thinking of investing in Newcastle at the moment "must have rocks in their head".
"The Government is incapable of moving forward," he said.
Ms McKay said the Government was committed to the city and cited the temporary cruise ship terminal, land for University of Newcastle, money for Renew Newcastle and the draft coastal masterplan as examples.
"It is about time certain developers stopped talking Newcastle down and started doing their bit to renew the city centre," she said.
Walsh Bay-based CMF Commercial property development director John Buckman said it would be difficult to put a price tag on the historic property.
"We don't actually know [what it will go for], because we don't really know what it's worth," he said.
"It has had a fair bit of negative press and to be frank, rightly so - but there's a great opportunity here to do something."
Mr Buckman said it was not a foregone conclusion that the site would be turned into a bar. "It could be an office space or a retail showroom," he said.
The auction is on May 13 at 10.30am.
Mr Ngu could not be contacted by The Herald yesterday.
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