The Dennington community is relieved a residential rehabilitation facility won't be built in its backyard.
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John Harris, president of the Dennington Community Association, said the community was in favour of The Lookout.
However, community members had concerns about the facility being on Atkinsons Road.
"We were always in favour of a centre somewhere in our community because of the need," Mr Harris said.
"We just felt it wasn't the right location because it was so close to 11 properties.
"People in that situation would probably be looking for privacy and we didn't think they would have that at that site."
Mr Harris said the group had looked into similar facilities in other areas of the state.
"We looked at one at Benalla and that was 17 kilometres out of town," he said.
Mr Harris said community members had offered to help WRAD find another suitable location.
He said that offer remained.
"We are behind The Lookout and we are happy to work with them and find the right location."
Mr Harris' comments came after WRAD Health chief executive officer Mark Powell revealed The Lookout - which is reliant on state government funding - would not be built at the Dennington site.
"They are looking for a different site," Mr Powell said.
"We did have a site, as the community would be very aware of - in Atkinsons Lane - but that's not on the table at this stage.
"We're looking for a greenfields site."
VCAT gave WRAD Health the green light for the facility to operate from the Atkinsons Road site after a number of objections were lodged by Dennington community members.
Objections related to the size of the facility, proximity to neighbouring properties and safety and security.
Mr Powell told The Standard he hoped The Lookout would be funded in the upcoming state budget.
"We're in a state of limbo until we hear the budget announcement on May 7," Mr Powell said.
"The community has contributed significant amounts of money to The Lookout and we feel that it's time to get some answers."
Mr Powell said more than 800 people sought treatment for substance issues at WRAD Health in the past calendar year and less than 5 per cent of clients who needed residential care for substance abuse were willing to access it outside the south-west.
Mr Powell said alcohol was the highest primary substance of concern among clients in the past financial year.
He said the high number of people seeking treatment proved the need for a residential rehabilitation facility was growing.