Sydney's Callan Park Poised for Transformation into Urban Parkland with Commercial Activity

A long-term vision to transform a historic public space in Sydney's inner west into an urban parkland with commercial activity is one step closer to fruition.

Community consultation is underway on the new draft foreshore master plan for Callan Park, a 61-hectare parkland in Lilyfield.

The site was once used as a psychiatric hospital, originally known as Callan Park Hospital for the Insane, for more than a century from the late 1870s.

Today it is used as green space for locals, and the park also contains more than 130 historic buildings — many of which relate to the former psychiatric hospital.

NSW government agency Greater Sydney Parklands released the foreshore master plan on Monday.

It stated the aim of stakeholders was to invite more Sydneysiders to visit Callan Park and make use of the space, while balancing natural and cultural values.

The proposal includes new walking paths, play areas and more parking — but one of the parkland's buildings, the Cane Room, would be retained and adapted into a cafe.

"The master plan explores opportunities like a cafe as one possible future use for this space," Greater Sydney Parklands chief executive Joshua French said.

"We want to make sure any new use at the Cane Room complements the character of the park and enhances the visitor experience in a sensitive and appropriate way."

But the future of land use opportunities for cafes, markets, galleries and museums depends now on the passing of amended legislation.

A commercial sticking point

Current legislation means development at Callan Park can only be carried out on a not-for-profit basis. This includes only leasing the historic buildings to not-for-profit organisations.

A parliamentary review in June 2025 recommended commercial for-profit activity should be permitted in Callan Park.

Community groups had said they wished to see the heritage buildings restored for not-for-profit interests only.

In February, the NSW government introduced new reforms to parliament to allow for appropriate commercial activity at Callan Park.

Minister for Planning and Public Space Paul Scully said modern communities now expected a degree of activation in their public spaces, like coffee shops and kiosks.

"We're protecting our parklands without standing in the way of sensible activations like cafes," he said.

The proposed reforms were debated in parliament last week, with the Coalition supporting the bill.

Greens MP and member for Balmain Kobi Shetty told parliament while the Greens agreed with some parts of the bill, they believed it went beyond what was necessary.

"We can continue to improve Callan Park without undermining the core protections in the Callan Park (Special Provisions) Act," she said.

"We know that there are several active not-for-profit and local community groups that have put their hands up to work with this government … unfortunately, the government has set the rent, and the rent is too damn high."

Liberal MP Mark Hodges told parliament "limited and carefully managed commercial activity can, and should, play a role in supporting the long-term maintenance and activation of these spaces".

Mr French hoped the revitalisation would ensure the community had better access to Callan Park's foreshore.

"The master plan aims to open more of the park for people to enjoy, while still protecting the things that make it special," he said.

Revitalised Bay Run

The foreshore is the most used area in Callan Park with about 5,000 people passing through the Bay Run each day.

It is a popular 7 kilometre shared pathway circuit around Iron Cove, regularly used by walkers, runners and cyclists.

The plan also focused on improvements to the circuit.

It included separating pedestrians and cyclists with line marking and upgrading the existing asphalt surface at a certain section.

New trees would be planted along the Bay Run to provide shade for people using the path.

"Revitalising Callan Park will make the park more welcoming, easier to get around, and livelier for the inner west community," Mr French said.

"Ultimately, it's about delivering a public space that locals can be proud of."

Community consultation on the plan would remain open until June 21.