An alarmist leaflet suggesting the Eldon Guest House in Katoomba is about to become a halfway house for ex-prisoners is circulating in the Upper Mountains.
But it has been firmly rejected by the company, Providential Homes, whose logo adorns the flyer.
One side of the leaflet reproduces a document about the "Katoomba Restoration Centre", which spruiks a 63-bedroom facility with dormitory, single or double rooms plus a detox/rehab wing.
On the reverse, a typed screed begins: "Why don't I know that a halfway house for up to 70 prisoners a day is opening in March 2015 and will be located at 9 Lurline St, Katoomba at the old Eldon? Did anyone ask the people who work and live in Katoomba if this was a good idea?"
It continues: "Providential Homes caters to all prisoners, child molesters, murderers, armed robbers, drug dealers, drug addictions, violent people... Will an influx of prisoners into Katoomba impact the local businesses and surrounding residents?"
But Suzanne Hopman, general manager of Providential Homes, which provides food, shelter and support for vulnerable people including former prisoners, said there were absolutely no plans for such use of the Eldon.
"The document was designed for internal discussion and to get feedback and ideas if we were to manage the Eldon," said Ms Hopman. "Unfortunately someone has distributed it."
She said the company had received some calls "from concerned people" and Blue Mountains council confirmed it had also been contacted. In response, Ms Hopman and director Warren Weir had composed a letter to council, which they have also posted on their website.
They say the Eldon "will be open to all people seeking accommodation, including backpackers and general tourists".
The letter also emphasises that the flyer was intended "only to be distributed to selected management at Housing and Community Corrections as an idea and discussion paper seeking feedback".
It concludes: "We have decided not to proceed with obtaining permission to do this and will adhere strictly to the approved use of the building as a guest/boarding house."
Ms Hopman said Providential was still considering taking over the management of the Eldon, but "as a boarding house/guest house as it has always been. We know that there's a real need for budget accommodation in Katoomba."
The Eldon is currently boarded up as fire safety requirements have not been met. Council has issued a pre-lodgement land use advice for a proposal to recommence use of the building as a boarding house.
