Having failed to sell the former Mulwaree Shire Council Chambers last year, the council has decided to invite expressions of interest again.

The NSW Department of Corrective Services will move out in August, leaving the space vacant and a gaping hole in rental income.

The council reaped $440,000 in rent last year, enough to pay for its maintenance.

General manager Warwick Bennett revealed to the most recent meeting that the council was negotiating with another State Government agency to lease a portion of the ground floor. "We have no other offers for tenancy of the building," he reported.

". . . We have had interest from a number of organisations to use it for various community uses, but none are able to afford market rental."

He recommended calling for expressions of interest in sale, lease and community use of the office block.

Community organisations would have to outline the wider benefits and the rent offered. The council would have the right to decline all applications.

Cr Denzil Sturgiss was concerned the council might require the building, given the McDermott Centre's adaptation for a performing arts centre and the need to re-house occupying community groups elsewhere temporarily.

But Mr Bennett said with the operations department moving to the new Hetherington St depot, there would be plenty of room at the Civic Centre.

Cr Margaret O'Neill argued the space should be used for commercial rather than community purposes. "We need to start getting professional," she said. "It should be used wholly and solely for commercial (uses)."

But Mr Bennett said his recommendation didn't inhibit commercial use: in fact, it encouraged it. "We have significant income coming from that building and we need to replace it," he said. "It's for sale or lease but there are community uses of significant benefit that shouldn't be discarded until you as councillors have had a chance to consider them. That's why we wanted a wide range of uses."

In response to a further question by Cr O'Neill, he said it wouldn't be unreasonable to request a community group to vacate a space within six months, should a commercial opportunity arise.

Cr Alf Walker agreed that while it was important to replace rental income, other uses should be considered given that it was a community owned building.

Councillors will consider the expressions of interest in a confidential briefing session.