Dunedin City Council building inspectors visited the former Aaron Lodge Holiday Park last week to assess what needed to be done, Mr Radich said.
Responding to private developers’ complaints that the council was not solving the city’s housing crisis, he said the council was continuing to explore repurposing Aaron Lodge, which housing agency Kainga Ora owns.
"We are now working through what is required and have a high-level plan for use of the property that is constructive."
The plan would use existing buildings on the site in Kaikorai Valley Rd rather than razing them and rebuilding.
In response to a request for help from the mayor and charities, Housing Minister Chris Bishop wrote to Mr Radich on June 21 saying the park was not a "viable option" for temporary or emergency housing partly because extensive upgrades and repairs would be needed to bring the site’s buildings up to standard.
However, the council had the permission of Kāinga Ora to enter the site and assess it.
Mr Radich would not be drawn on whether the plan would involve a change of ownership from Kāinga Ora to the council or a third party.
The agency bought the park for more than $4 million three years ago after it had been temporarily used as a supported isolation and quarantine facility during the Covid pandemic.
It said at the time it was considering a "number of interim uses" for the site, but none have been realised.
Mr Radich viewed his plan for the lodge "with optimism".
If it proceeds, the housing would be for people who needed "assisted living".
He understood people were living in differing states of homelessness across the city, such as couch surfing.
"It is inappropriate to pre-determine who will be ideal occupants for [Aaron Lodge] at this point in time."
He expressed his personal concerns about homelessness.
"It is a very disturbing sight to have homeless people in our community and I feel very strongly that there must be things that can be done."
He would not comment on housing developer Roger Fewtrell’s complaint that the council had poured cold water on his plan to build container homes for the homeless, saying he did not know the details.
Kainga Ora regional director Kerrie Young said the position of the agency on Aaron Lodge had not changed.
"We are, therefore, not working with the council on any proposal to use the site for temporary housing.
"We have agreed to provide the council with access to the site if they want to undertake their own assessments, at their cost."
Cr Sophie Barker said the idea of a Aaron Lodge revamp for homeless people would be a band-aid solution, at best, given the number of homeless in the city.
It would not solve the city’s housing crisis and, as far as she knew, nothing had been budgeted by the council to repurpose the holiday park.
The idea "didn’t answer to the need for systemic changes and funding to address the homelessness crisis".
