Williamtown residents whose properties are needed for the Special Activation Precinct have been told they must sell up by Christmas.
NSW Department of Planning representatives met with about 12 Cabbage Tree Road property owners this week to advise that their land would be compulsorily acquired for the SAP.
Valuations and negotiations under the Just Terms Act will commence in the middle of the year, which is also when the project masterplan is likely to be approved.
"They are going to turn this property into drainage and the one up from us is going to be a holding pond," Jenny Robinson who has lived with her husband Terry on an 8 acre rural residential lot for the past 22 years said.
"We are basically being acquired to allow developers to build on the land they have bought up."
While the SAP has been touted as an ideal solution for those seeking to sell PFAS contaminated land to a guaranteed buyer, there are concerns the amount offered will not adequately compensate sellers for the loss of amenity and lifestyle.
Adding to the frustration is the fact that valuations will be based on a property's post-contamination value.
The NSW Valuer General estimated in 2019 that Red Zone properties had been devalued by about 15 per cent as a result of PFAS contamination. By comparison, those in neighbouring areas had increased by 30 per cent.
The Robinson's were among 500 Red Zone residents who participated in a class action against the Commonwealth in 2020 for the impact of PFAS contamination on their property values.
The residents received a total of $86 million in compensation, of which about 40 per cent was swallowed by costs and fees.
The compensation was distributed according to how much individual property owners were affected.
Despite their payout, the Robinson's do not believe they will receive enough for their property to allow them to buy an equivalent property outside the Red Zone.
"Even if they say we'll give you what your property is worth if it wasn't contaminated we've got to find another property. Where else can we afford to go that is close to the beach, Newcastle and the hospital?," Ms Robinson said.
The Newcastle Herald understands that negotiations are underway between the federal and state governments regarding the possibility of the federal government paying property owners the difference between the pre and post contamination valuations.
Paterson MP Meryl Swanson confirmed "all options were on the table".
"I went to the election with a promise to the people in my electorate that I would have a full review of this terrible situation to seek a permanent solution for the residents affected," she said.
"I am happy to report that we have worked tirelessly with Defence, state government agencies, local council and the community committee towards solutions.
"Everything is on the table.
"All levels of government, including assistant minister, Matt Thistlewaite, are meeting again on March 3 to further our discussions and progress the matter."
"I am very pleased with the results so far and look forward to an Albanese Labor Government delivering improved outcomes for residents impacted by PFAS.
A Department of Regional NSW spokeswoman said the proposed master plan for the Williamtown Special Activation Precinct provided a 40-year vision for sustainable economic growth that will establish the region as a defence and aerospace hub to create thousands of highly-skilled, long-term jobs.
"The number of properties and staging of acquisition will be determined following the finalisation of the precinct's master plan and investment decision, expected in the second half of 2023. The NSW Government continues to engage with the Commonwealth in relation to the management of PFAS," she said.
"Acquisition of land that is undertaken by the Regional Growth NSW Development Corporation would be undertaken in accordance with the Land Acquisition (Just Terms Compensation) Act 1991 (the Just Terms Act), which sets out legislative requirements for the process."
