Community and business leaders in Castleford fear a home for men with drug and alcohol problems could affect the town’s regeneration hopes.
Reflection Housing Association has been running the former Charlotte Hotel, on Station Road, as a rehabilitation institution since 2013.
But people living in the town and business leaders claim staff at the home, which houses up to 30 men at a time, have fenced off an access road outside it.
Derek Blakeston, vice chairman of Castleford Community Partnership, said: “It is absolutely ridiculous what the staff at the home are doing.
“They are trying to take over the road and claim it when there is no way it belongs to them.
“We fear it will affect the town’s ongoing regeneration works because if developers or business come to the town and see the effect the centre is having they might be put off.”
Plans for a £3.2m revamp of Castleford Railway Station, which is next to the facility, have gone on show to the public this week.
But those living in the town fear future regeneration including Wakefield Council’s £44.5m Castleford Growth Plan could be affected by ongoing issues in the town centre.
Mr Blakeston said: “I had serious concerns about this hostel when it was first proposed and they have only got worse.
“We don’t want it to ruin our town.”
The Express contacted Reflection Housing Association but was told no-one wanted to comment.
A Wakefield Council spokesman said it was looking into the issue of the fencing and who owns the road outside.