Charters Towers business owners and residents are considering legal action over a proposed non-resident work force accommodation centre planned just outside the CBD.
A development application was lodged with the Charters Towers Regional Council for 101 demountable buildings (each containing four rooms) at 82-92 Deanes Road at Millchester, to provide "temporary accommodation opportunities" for various industries and worksites.
The applicant said demand for the facility was realised due to the expansion of nearby mines including Carmichael and Ravenswood mines.
"The development will free up the local motel and hotel accommodations for use by the normal visitor traffic to town (tourists, business trips, family from elsewhere visiting, etc)," the application read.
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But resident Shane Downs, who lives across the street from the site, argued otherwise.
He launched an objection to council against the project, with more than 85 local residents signing his form last Friday.
Mr Downs also engaged Townsville law firm Connolly Suthers Lawyers to consider the matter.
"The objection was launched on the grounds of noise, traffic, the proximity to a state school, the de-valuation of land, and the influx of cheaper accommodation, which would impact local accommodation providers in the town," he said.
"We're not against additional accommodation. That type of accommodation is not a level playing field for local hotels or motels but it's certainly the location next to school and the rural residential area, so we'd like it stopped and for them to reconsider."
Cattleman's Rest Motor Inn and the Heritage Lodge Motel co-owner Simon Mulligan said while he welcomed local competition from registered-hotels operating in the region, council needed to ensure the development was held to the same rules.
"It was the consensus of the group, that we wouldn't object to this development on a competition basis, and if someone wants to build more accommodation in Charters Towers that's fine," Mr Mulligan said.
"We just want to make sure the council was going to hold them to the same set of rules that any other development would be held to."
Kennedy MP Bob Katter feared the non-resident accommodation development would impact local businesses financially.
"The people initiating this proposal are doing so with the best of intentions, and we love business initiative - get up and go people," Mr Katter said.
"But they must insure their plans are for the benefit for the town."
Mr Katter said there was no reason the accommodation development couldn't be a more permanent structure that serves as more traditional housing.
The proposed site is opposite the Millchester State School.
A spokesperson for the Department of Education said they were aware and were lodging a submission to the council in response to the proposed development.
"Should this development be progressed, the school and the department will work with all relevant parties to ensure a coordinated approach to the safety of students, staff and the school community," they said.
A council spokesperson said they were unable to comment.