Wagga City Council is planning to negotiate a better deal for stage two of the riverside development after rejecting all interested tenders at Monday night's meeting.
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The council's regional activation director Michael Keys said the bids received through the tender process were above the council's budget for the project.
He said the council has, therefore, decided to enter negotiations with a short-list of tenders to ensure the community "gets value for their money".
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"The decision has only just been made, so we will start those discussions early next week and make sure it starts happening," he said. "We will go through the finer details of their pricing and what they can deliver."
Some of the features of stage two of the riverside development include pop-up shop containers, a water play park and open spaces.
"Certainly early in the new year, we will see some real action down on the ground," Mr Keys said.