The community group opposing Yarrawonga's library redevelopment on the town hall site is refusing to concede defeat despite Moira Shire securing $3.75 million for the project.
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A low interest community infrastructure loan was confirmed late last week and follows the recent move to call for tenders to complete detailed design work with a closing date of later this month.
Moira Shire is eyeing off a 2021 construction start, but Yarrawonga Community Action Group has not given up hope of having the facility built at the old primary school site which would save the community hall located at the rear of the town hall.
The option of Moira Shire buying the school site at a discounted cost was discussed behind closed doors at council's March meeting.
"There is always a chance commonsense will prevail," action group spokeswoman Jeanette Wilson said.
"They can no longer say the government is going to sell the primary school to the highest bidder when we've managed to alert the whole community to the fact it is available to them for community use at a low cost."
Mrs Wilson said in comparison to a library development on the primary school land, the town hall was a "boring location".
"The school is an exciting option," she said.
"There is space all around, you could have a decent playground and we do need more open green space."
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The anticipated overall cost of the town hall redevelopment is $5 million.
Another complicating factor is a recently submitted heritage nomination for the site.
"We doubt the community hall component of the application has much merit, but we certainly acknowledge the significance of the town hall and can't wait to see it getting more use as part of a revitalised civic precinct," Moira mayor Libro Mustica said.
"In addition, the old Maternal and Child Health building demolition works have been completed and it is starting to show how the site can be opened up and ultimately connect through to Belmore Street.
"I am confident we can work through everyone's concerns to achieve a wonderful civic precinct."