Squatters, illegal parties and a rare court case over 'magical' heritage cafe

When sisters Madeleine Thompson and Renee Aroney recall memories of their grandfather's art deco cafe, they describe it as a "magical place", akin to the fictitious world of Willy Wonka and the Chocolate Factory.

"There'd be these big cockpit vats … where they'd mix up all the confectionery," Ms Thompson said.

"And then they had long marble tables where they lay out this big, gooey, sticky stuff that turned into nougat or fudge."

The heritage-listed Paragon Cafe in Katoomba, where Ms Thompson spent her teen years packing chocolates and wrapping pieces of nougat in wax paper, is now the centre of rare legal action from the NSW government.

Renowned for its inter-war art deco interiors, including a Moruya marble soda fountain and alabaster friezes, the 110-year-old building has landed in the NSW Land and Environment Court over its state of disrepair after repeated vandalism, illegal parties and squatters.

The sisters have both kept tabs on the legacy built by their papou (grandfather), Zacharias Theodore Simos, in the decades after the Paragon's sale and its ultimate closure in 2018.

Ms Aroney said it was "just terrible" to witness the cafe being neglected and abandoned after Mr Simos spent more than half a century bringing it to life.

"Really there was no expense spared," she said.

"He had a vision and he was a 15-year-old boy that left a tiny Greek island called Kythira, which is like a teardrop off the third arthritic finger of the Peloponnese."

The 'magic' of the Paragon

Established in 1916, the Paragon was lauded as a success story of Greek immigration and entrepreneurship.

During its glory days the cafe attracted scores of tourists and Blue Mountains locals, who would queue out the door to buy its house-made sweets and American-style desserts.

In building his empire, Mr Simos had drawn inspiration from cafe culture and confectionery-making that he encountered during his travels to Europe and the United States.

At one point, he had flown to Switzerland to master the art of chocolatiering.

But it was important to remember that their grandfather was an aesthete, who had the ability to create "magical spaces", Ms Aroney said.

As business boomed in the 1920s, the Paragon underwent two major renovations with the introduction of the banquet hall followed by the ballroom.

She said the rooms were designed by prolific architect Henry Eli White, who was behind Sydney's heritage-listed State Theatre, while Dutch sculptor Otto Steen was commissioned to create alabaster friezes depicting Greek mythological figures.

"[White] designed a sprung dance floor that was used for weddings and it later became a bar area, but it had carved wooden pieces around the top of the ceiling and behind that was different coloured lights so you could put on red or yellow or blue or green," Ms Thompson added.

"And then opposite that was another room that was sort of done in the style of a ship … you know with the old walnut wooden panelling used in cruise ships."

Mr Simos also used the Paragon to sponsor a number of Greek immigrants to Australia, where they could train.

Many of them went on to open establishments of their own, not only in NSW, but across regional Australia.

Ms Thompson said the Paragon and similar old-school Greek cafes, were "kind of a business where you couldn't run it the way you did back then".

"You have to step up with modern times … if we still had it we'd probably have to hire a manufacturer," she said.

After Mr Simos's death in 1976, the Paragon was taken over by his wife Mary and later managed by several other relatives before it was sold in the early 2000s.

Rare heritage legal action

In a rare move, the NSW government has taken the current owner of the Paragon, Conset Investments, to the Land and Environment Court on July 17.

The derelict condition of the building is alleged to have breached minimum standards requirements under the Heritage NSW Act 1977.

Photographs taken by Heritage NSW officers in 2014 and 2025 showed the interiors graffitied, vandalised, and riddled with mould after being ravaged by illegal parties, squatters, and water damage in recent years.

Other photos show a partially collapsed ceiling, peeling wall paint, and gaping holes from missing floorboards.

Local group Friends of the Paragon has been lobbying for urgent repairs and maintenance to be carried out for a number of years.

Its president, Robert Strange, estimates restoration works could now cost more than $1 million due to the extent of neglect.

"For the last eight years it's been a matter of trying to have the owner secure it against both the onslaught of the elements, and a criminal element, that exists within this community," he said.

Mr Strange said at one point the roof was replaced, but because work was carried out "ineffectively", rainwater had leaked from the ceiling and caused extensive water damage over time.

He said Friends of the Paragon wanted to see the former cafe properly stabilised and protected, and eventually reopened.

"It was an elaborate and very welcoming place in the heart of this tourist-oriented town, and its absence really does create a void,"

he said.

Conset Investments principal director, Sydney lawyer John Landerer, told the ABC works to make the property compliant with heritage laws would cost about $700,000 and were expected to be completed in May 2027.

When asked if he had plans to reopen the cafe, he replied: "We certainly do want to open it to the public."

The court action follows two intervention orders by Heritage NSW to improve the property's condition.

Heritage Minister Penny Sharpe said the government was launching legal proceedings to protect "an irreplaceable treasure" that reflected more than a century of migration in the Blue Mountains.

"Places like the Paragon carry our history and must be protected because once lost, they cannot be replaced," she said.

Blue Mountains MP and Parliamentary Secretary for Heritage Trish Doyle said it was "deeply disappointing" to see such an important piece of history fall into disrepair.

"The government has worked hard to support a positive outcome here, but enough is enough," she said.

Future uncertain

While the future of the Paragon remains uncertain, Ms Aroney and Ms Thompson hold close memories of hand-dipped rocky road, giant chocolate marble slabs and the smell of homemade waffles.

"It really was like Willy Wonka's chocolate factory,"

Ms Aroney said.

Ms Thompson said she feared the art form of making confectionery in-house was slowly being erased in the age of manufacturing.

"I feel a terrible sense of loss and loss of community, it's hard to build that up again," she said.