The union representing workers at Newcastle's UGL train workshop says the NSW government must not sacrifice jobs for housing at the site.
The Newcastle Herald reported on Tuesday that the owner of the former Goninan site at Broadmeadow was talking to City of Newcastle and the government about rezoning the 16-hectare block for a massive new housing and hotel precinct.
Australian Manufacturing Workers Union state secretary Cory Wright said on Wednesday that it would be a "tragedy" if the Broadmeadow site was redeveloped "to the profit of developers and our community loses good, long-term and secure jobs".
Opposition leader Chris Minns toured the UGL workshop last month and promised a Labor government would return train building to the NSW manufacturing sector.
GDI Property Group bought the Goninan site in 2014 and rented it back to UGL on a 10-year lease with at least one five-year option.
UGL has taken up that option and will remain on the site until at least 2029.
GDI managing director Steve Gillard said the site's potential rezoning for at least 1500 dwellings had "huge potential for Newcastle".
The NSW government announced on Monday that it would initiate accelerated rezoning assessments for land in six Sydney suburbs and Broadmeadow to help relieve housing supply shortages.
The Newcastle Herald has been told the Goninan site is one of several the government has been examining, but the 2029 lease indicates the land is not a short-term solution to housing supply.
The Department of Planning's Hunter Regional Plan 2041, published on Friday, says the Goninan site and "other industrial assets on Clyde St and Chatham Rd could revitalise ... the northern gateway of Broadmeadow" with new "walking and cycling connections and affordable housing".
Mr Wright said NSW needed manufacturing jobs to be an "economic powerhouse".
"The UGL Broadmeadow site in all its previous forms has assisted the state in building our infrastructure needs, bolstered our economic standing and supported thousands of workers and their loved ones for lifetimes," he said.
"We are calling on the government to be transparent with any planning proposals and to address the community's concerns regarding the proposed development."
UGL declined to comment about whether it plans to move its workshop to elsewhere in the Hunter if GDI proceeds with the rezoning.
Mr Wright said the government must take a "holistic" approach to addressing housing shortages.
"The housing shortage isn't an isolated issue," he said. "We've known for some time that Newcastle business groups have had grand plans to develop the UGL Broadmeadow rail facility site and surrounding sites."
UGL's Broadmeadow address is on the NSW Environment Protection Authority's list of contaminated sites.
An EPA spokesperson said UGL had notified the authority of the contamination in 2014 but the EPA had deemed it was not significant enough to be regulated under the Contaminated Land Management Act.
UGL said at the time that its investigations had found the contamination included petrol and diesel fuel.
The Herald has been told the adjoining council depot in Turton Road also could be rezoned for housing.
The rail depot behind Hunter School of the Performing Arts also could be included in the accelerated rezoning program, which bypasses councils as an assessment and consent authority.
Developers can apply before January 22 to have rezoning proposals assessed under the program.
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