Katoomba has been identified as the strategic centre of the Blue Mountains, and a master plan to revitalise the town is on the council's agenda.
The Western City District Plan established Katoomba as the strategic centre of the Mountains due to employment, facilities and key services.
Blue Mountains council will develop the master plan in stages, breaking Katoomba into several areas due to its size: the town centre, Lurline Street, Echo Point and Scenic World, The Gully, and Katoomba Hospital precinct and surrounding area.
Katoomba Chamber of Commerce and Community president Mark Jarvis said much could be done within the town centre to revitalise the area.
"The look, flow and feel of our towns is really important," he said.
"Katoomba has been neglected for so long."
Mr Jarvis said the chamber was looking forward to the planned upgrade of the civic centre area, describing it as "a blight", and thought more could be done to green up the "Soviet style concrete space" with a hanging garden on the wall of the old library.
Toilets in this area, and good signage off the main street directing tourists to these toilets was also essential.
"It's one of Australia's oldest tourist towns and we don't have good facilities," Mr Jarvis said.
Traffic flow must be addressed, whether that could be increasing the size of Yeaman Bridge, or introducing one way streets in the CBD.
"Everyones got their angry faces on when they are leaving Katoomba. There's been a lot of inaction at all levels of government [on this]," Mr Jarvis said.
And while money has been thrown into improving parks at Glenbrook, Springwood, Blackheath and Wentworth Falls Lake, Katoomba's Kingsford Smith Memorial Park is ripe for a makeover.
"It's the main town in the Blue Mountains and Katoomba doesn't have a tier one park," Mr Jarvis said.
If it's status was upgraded, he believes this would attract more resources, with opportunities to develop the old music bowl so it could be used, and improving the cold climate gardens.
The master plan process will also examine what to do with key sites such as the old Katoomba Golf Course.
The chamber says a university would be a great fit.
"There's an enormous amount of students that travel off the Mountains. There are no higher education facilities and this could be addressed. It would provide good quality employment," Mr Jarvis said.
Just as introducing Charles Sturt University at Bathurst and campuses in Dubbo and Orange had seen these towns flourish and employment increase, this was possible in the Blue Mountains too, Mr Jarvis said.
A Katoomba Master Plan Reference Group will be established during the first stage of the process, with a call for expressions of interest from the community to fill 8-10 positions.
The council plans to consult widely with the community in developing the master plan, and build on earlier plans for the area such as the 1999 Katoomba charrette report and town centre strategy, and destination management, visitor infrastructure, the local strategic planning statement and the community strategic plan.
