Downer Community Association chair Di Fielding has welcomed the redevelopment plans and said it would be an enormous boost for residents to have their own shops again.

“Up until the early 2000s this shopping centre was a thriving shopping centre,” Ms Fielding said.

The shops had included a convenience store, pharmacy and restaurants, but when the leases ran out they were not renewed by the then owner, who wanted to redevelop the site.

Ms Fielding said a development application was lodged in 2004 but eventually lapsed and, to the disappointment of residents, the shops remained vacant.

Years later the lease was bought by Kotsobola Group director Theodore Poulos, who had lived in the suburb as a young child. He has grand plans for the redevelopment of the site, which will bring eight businesses to the area.

“The community association is absolutely thrilled, the people of Downer are absolutely thrilled, because it's going to have all sorts of 'you beaut' stuff,” Ms Fielding said.

A self-described "urban rejuvenator", Mr Poulos plans to strip the building back to its original red brick and make it as carbon neutral as possible, with cross ventilation and skylights. A number of mezzanines will be built for storage or small office space. There will also be a basement, which businesses owners will be able to access with individual staircases and some scissor lifts.

“The basement is for people like [Lonsdale Roasters part owner] Alan Smith to have his coffee beans and roasting and things like that,” Mr Poulos said.

“We've also got a guy coming in to do gelato and wood-fired pizzas and he's going to make his gelato in his basement.”

Mr Smith has committed to taking the corner unit of the building.

Mr Smith said he was inspired to set up a businesses in the suburb after becoming a resident of the area and seeing first-hand how the former shops had been neglected.

“I came up here to go to the bakery and the Indian restaurant and there was nothing here. It had all closed down and it was derelict,” he said.

“I asked everybody that I knew 'What's happening out at Downer?'”

Mr Smith said redeveloping the site and bringing local businesses to the area would have a big impact on local residents.

“It's about activating the area and bringing life back to Downer,” he said.

Mr Poulos has committed to investing money in the town square as well as the building and would like to transform it into a vibrant outdoor space with gardens and outdoor dining. He had also been hoping to extend the square out about three metres into the back car park and reconfigure the parking spaces to allow for more outdoor seating.

“We wanted a shared zone here for people riding bikes and walkers, and no one gets hit and no one gets hurt – we slow traffic down,” he said.

He says he showed TAMS and other government departments his original development plans before he lodged the first development application last year and they were endorsed.

However, once the application was lodged it was knocked back by Territory and Municipal Services and he was asked to modify the back car park so it could be widened to allow for traffic from the neighbouring redevelopment of the former Downer School. The latest application has been modified to reflect that request.

Economic Development Directorate acting director general Dan Stewart said the directorate welcomed Mr Poulus' application, but denied claims the developers were unaware of the road and parking issues until after they lodged the original application.

“[The directorate] and TAMS engaged closely with Mr Poulos to help with the lodgement of his DA in order to address concerns about the narrowness of the road and parking related issues. Unfortunately the original DA was lodged as is, leading to an amended DA now being required,” Mr Stewart said.

“Nevertheless, we are committed to continuing to work closely with Mr Poulos and the Downer community, and are confident the final outcome will be positive for the suburb.

“The upgrade of the Downer Village and the reopening of the shops is an important part of the broader Downer redevelopment strategy.”

Despite the delays surrounding the development application, Mr Poulus said plans for the development were progressing well. There are already a number of businesses, including a bike shop, a hairdresser and a book store, interested in leasing space. But Mr Poulus said he would wait for the application to be approved before any contracts were signed.

“We could sign them up subject to, but we don't want to muck them around,” he said.

“We're pretty much right to go straight away. We would hope we'll have tenants in here operating by Christmas.”

Comments can be made on the development to the Applications Secretariat at PO Box 365, Mitchell, ACT 2911 or actpla-customer-services@act.gov.au by May 2.