Plans for 145 homes on land at the former Parker Pen factory in Newhaven have been submitted for outline planning permission.
The scheme marks a departure from the original proposal from Newhaven Eastside LLP which also included a 200 seat community facility.
Big changes are also in the pipeline for Newhaven Railway Station where a transport interchange will be built beginning next year.
The ambitious scheme for the former factory site on land at 52 Railway Road includes associated access, car parking, servicing and open space.
In the minutes of Newhaven Town Council’s full council meeting, held on Tuesday July 15, it said: “Following discussion it was resolved to ask the clerk to write both to Lewes District Council and the developer expressing the town council’s disappointment and unhappiness at the hall being taken out of the plans.
“The letter should emphasise that this was intended to be a community asset for the whole town and that the town council is very disappointed that this opportunity has been lost.”
The site has already been cleared of factory buildings.
Newhaven Eastside LLP said it would include 38 one or two bedroom flats, 107 houses with a mix of terraced and semi detached properties, with two to four bedrooms.
The district council’s planning committee will have the final say on the scheme.
Meanwhile plans are progressing for the transport interchange first discussed some years ago.
East Sussex County Council said it was working on plans for a dedicated slip road for bus and taxi use, a new taxi rank and a drop off and pick up area and new bus shelters.
The project is funded by a combination of local development contributions and the county council’s capital programme for local transport improvements amounting to £200,000.
The council is consulting with the Port Authority, town council and bus operators and will ask the public for its views on the proposals towards the end of the summer.
A county council spokesperson said: “We intend to be in a position to start construction work in around March 2015 to ensure the interchange is in operation before the new University Technical College opens its doors to students in September 2015. This project looks to provide better public transport facilities to improve the connectivity between the railway station, bus services in the town and the new University Technical College.”