Mittagong real estate agent Arvo Pikkat told this week's Chamber meeting that the Alexandra Square should be sold and the money used to build a sports and leisure centre in Mittagong.

Mr Pikkat said Alexandra Square was too valuable a piece of real estate not to be developed.

He estimated the value of the site at between $2.7 million and $3 million.

"Council should consider selling it and utilising the funds to build a facility for all of Mittagong," he said. "Utilising that sort of funds, council could really build something for all of the town."

The Mittagong Chamber of Commerce will make a submission to council supporting the retention of Alexandra Square as public space.

"Alexandra Square should be a multi-purpose community centre and not sold off for housing," said Chamber president Charlie Johns.