Locals have raised concerns about the rehabilitation facility where former TV host Andrew O'Keefe is being treated.
The 50-year-old had been in custody since he was arrested in January and charged with assaulting and choking a woman.
He arrived at Connect Global in Port Stephens on Monday night as part of his bail conditions.
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Since then, Port Stephens Council has revealed "use of the premises for a rehabilitation centre is currently the subject of a court matter".
Connect Global director Ross Pene started the organisation in 2013.
His solicitor, Mark Ramsland, told 9News "the current approval is for short term accommodation, originally set up as a 'Fisherman's Village'".
"We're trying to change the use so it's permanent accommodation for the participants here," he said.
Patients live in cabins close to members of the public, who use nearby cabins and facilities including the pool and tennis court.
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One local claimed residents consume alcohol on site, after old images of Bandidos club members at the facility resurfaced.
Pene denied those allegations.
"There's no booze here. There's no drugs here. We take random urine tests and alcohol tests. We do alcohol tests every night," he said.
"If anyone has a positive reading, they're out. So it's strike one here and out."
On Thursday afternoon, police arrived at the facility to conduct bail condition checks.
"The difference here is I believe we don't need a stick, we just need good healthy relationships," Pene said.
O'Keefe will spend between six and 12 months at the facility.
