Orange City Council allowed a planning proposal affecting 290 hectares of general industrial and primary production land on Clergate Road to proceed to the NSW Department of Planning for consideration.

The land would be rezoned to large residential lots between 4000 and 8000 square metres.

But in June, the department asked developer Bob Healy to remove 100 hectares from the proposal prior to public exhibition.

The three lots affected included the abattoir and land to its north.

The property was placed on the market for expressions of interest until June 30 to ensure no one wanted to reopen the site as an abattoir.

The listing included a 1000-head shift capacity, suitability for flour milling or other food production industries and potential for the 2.5-kilometre rail frontage to be reinstated.

But according to a letter from planning services deputy secretary Marcus Ray to JRPP chair Gordon Kirkby in October, Mr Healy asked for the JRPP to review the recommendation.

The panel decided the rezoning had strategic merit because Orange’s Local Environmental Plan and the Orange Blayney Cabonne Land Use Strategy were both based on 2008 data and maintaining the industrial land use at Clergate would create conflicts with the rest of the residential subdivision.

The panel also concluded the abattoir would not be competitive with other industrial land in Orange because of the cost to remediate the site, there were other rail sidings available and the council had confirmed it would not include the site in future industrial strategies.

Employment and Economic Development Committee chairman Jeff Whitton said the subdivision would provide lifestyle blocks for tree-changers who wanted to run horses or chickens without the burden of a farm.

“The way Orange is moving towards the north of that area doesn’t make it viable for an industry like an abattoir to operate,” he said.

But Cr Whitton did not believe Orange had enough industrial land in reserve because blocks were quickly being taken up along the Northern Distributor Road and there were restrictions on the use of the former saleyards site.

The department will consider the panel’s recommendations before returning the proposal to the council for public exhibition.

Once gazetted, a development application would be required.

Mr Healy declined to comment.