The highly influential Friends of Lewes Society has described the so-called Phoenix Quarter of the town as “scruffy” and supports the principle of re-developing the North Street site.
But it must be of good design, meet the needs of the town and include flood protection measures, said the Society.
The site is now the hottest potato for the future of Lewes.
More than 2,000 people signed a petition last week urging sympathy for the businesses and community facilities which have emerged in the area.
Lewes District Council’s Core Strategy, the blueprint for the next 20 years on planning, will determine the fate of the controversial site.
Before the meeting that confirmed the Core Strategy will go through the full public consultation process, senior council officers and councillors met with Samira Harris, William Hardie and Dan Johnson, representing people working on the Phoenix Estate, who expressed their concerns. The meeting was described by Ms Harris as “incredibly productive”.
Robert Cheesman, Chairman of the Friends of Lewes Society, said: “We support the principle of re-developing the North Street site as it is currently scruffy and does not enhance the appearance of the town.”
The group said development there to meet housing targets is far more preferable than having housing at Old Malling Farm which is a conspicuous greenfield site.
The Society would like a riverside path and good connections with the existing town centre. Provision should be made for existing activities on the site and the possibility of retaining the historic buildings there considered.
The Society said it will also be considering the draft Local Plan when it is published in the New Year. But it will not be making comments on detailed design issues as they are not matters which are considered in such a Plan.
Ms Harris stressed that a vibrant and successful community had been established and said of the meeting with council officers and councillors: “We highlighted the fact that the original low rents of the warehouses had facilitated many start-up businesses, some of which are now employing teams of people, and they could only exist within big industrial units.
“The councillors have vowed to continue dialogue on this matter, to look at ways to support the regeneration that is happening and to review whether this can continue within Lewes or alternatively elsewhere in the district.”
Cllr Ruth O’Keeffe secured an amendment to the Core Strategy document that development would be subject to consultation with residents, businesses and community facilities on the site and in the local area.