Critics saying a jail would be incompatible with the planned creation of a mini-suburb of prestige apartments.
NSW Corrections Minister David Elliott is considering reopening the jail, which closed in 2011, and is now owned by the Deerubbin Aboriginal Land Council.
Apart from having to buy or lease the jail back, the government would have to spend a lot of money in bringing the ancient building up to scratch.
A spokeswoman for Mr Elliott said reopening the jail was “under active consideration” but could not say when a decision would be made.
President of Parramatta Chamber of Commerce Michael Mekhitarian said reopening the jail “doesn’t make sense” when it planned to put in a prestige residential and commercial development on its periphery.
“Apart from that, the cost of bringing the jail up to scratch for it to be used would be high,” Mr Mekhitarian said.
“And I believe the value of those apartments, if they go ahead and the jail opens, would plummet by up to 30 per cent.
Reopening the jail would be a short-term solution with long-term pain.”
Mr Mekhitarian said the government had “one chance to get it right” in developing a revitalised North Parramatta precinct that combined quality residential alongside a restored heritage area that would draw visitors from outside - and a jail was not the ideal fit.
His comments were echoed by David Morris from property consultants Knight Frank, who said values of the planned apartments would “drop by 10 to 30 per cent”, depending on their proximity to the jail, if it reopened.
“With a 20 storeys, even an apartment block a kilometre away, could have apartments looking over the jail,” Mr Morris said.
“No other major city has a jail near its CBD anymore and Parramatta has to be regarded as a city in its own right. Would they think about reopening Melbourne jail?”
Mr Morris said a jail would be an incompatible land use near a residential development.
David Borger, Western Sydney director of the Sydney Business Chamber, agrees, saying an operational jail would not fit in with the government’s vision of making Parramatta Sydney;s dual CBD.
Suzette Meade, President of North Parramatta Residents Action Group, which is opposed to the density of the urban renewal project, said there could be better uses for the old jail, such as an arts centre or museum.
Premier Mike Baird said the urban revitalisation project would go ahead, even if the jail reopened.
