Moyne Shire Council is proposing the club sign a licence agreement after a 21-year lease for the Griffiths Street crown land expired in 2015.

The new licence would be cheaper for the club compared with a lease but mean the council had access to the site for weekday council meetings.

Moyne Shire chief Bill Millard said the council needed the space because childcare facilities would likely expand into the council's current meeting rooms at the Port Fairy Community Centre.

"Council will then require access to a suitable facility for meetings, workshops and officer meeting," Mr Millard said.

He said the yacht club was "suitable for these needs given access, facilities and car parking".

The licence would also mean the council receives income the yacht club currently earns from hiring the venue for weddings and community events, totalling more than $8000 a year.

Mr Millard said the council would pay building running costs and insurance that could offset those losses for the club.

But yacht club commodore Darrel Cairns disagrees, saying there would be losses for the volunteer-managed club.

"Each membership would have to cost around $250 more to cover that cost," Mr Cairns said.

He said forfeiting control of the building didn't appeal to the club's 60 members.

"The yacht club will lose its identity. It's not only financial, it's a moral thing as well," Mr Cairns said.

"The council would control the amount of time they used it."

He said the club would not agree to a licence and instead wanted a new lease.

"They (the council) haven't prioritised their own infrastructure to provide for their needs and we feel they are taking advantage of that because we don't have a lease," Mr Cairns said.

"The reason we don't have a lease is because they just haven't done their jobs as managers."

Talks over a new lease for the land were ongoing for about five years and involved state authorities.

Mr Millard said a resolution with state authorities whether the yacht club was a community or commercial group "took a long time" with the council now treating it as a community group.

He said the yacht club took about 18 months to finalise a business case. But Mr Cairns also blames council "mismanagement" and staff turnover for the delays.

"Portland Yacht Club had their lease renewed last year and it took three months," Mr Cairns said. "Why has this taken five years?"

At a council meeting in April this year a new lease was ready for advertisement, but the club later raised concerns about the lease cost and the council instead offered it a licence.

Mr Millard said the licence would give the club "similar levels of access that a lease would" and there could be an option for the club to operate a bar at events.

The licence would cost the club between $400 and $500 a year, if the Department of Environment, Land, Water and Planning agrees, which is less than the $5100 the club says the lease was due to cost.

The club has agreed to pay about $17,000 in outstanding rent payments due after its lease expired in 2015, after the club continued to operate in accordance with the previous lease.

Mr Millard said the council could also propose to extend a licence agreement to the Port Fairy Marine Rescue Service at the site.

He said "a number of councillors" believed other community groups "should have access to such an iconic facility" as well.

But Mr Cairns questioned how community groups would gain access to the site if the council was guaranteed weekday access.

A report to progress the matter cannot be presented to council until the November meeting at the earliest due to the current election caretaker period.

Mr Cairns said the yacht club just wanted the lease the council had already voted to advertise.

"All we want is for them to proceed with the lease process they have already agreed to do," he said.

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