Throsby MP Stephen Jones visited the reserve last Wednesday, describing Lake Illawarra and the foreshore as an asset with "enormous potential".

"This place here is a gem, and could be fantastic," he said.

"Look at Diggies at North Wollongong - this is just as good, it just needs a touch-up. Right around the lake, there's the chance to unlock the potential of the place."

Last year, the state government announced the Lake Illawarra Authority would be replaced by an estuary management committee. Shellharbour City councillors supported the proposed committee structure, despite Wollongong City councillors demanding a firmer financial commitment from the state government before doing the same.

Land and assets managed by the LIA will be transferred to the relevant council, but both councils will share responsibility for managing the lake.

A report late last year outlined the LIA assets proposed to be transferred to Shellharbour council's ownership, including the kiosk at Reddall Reserve.

The report said additional maintenance expenses would be absorbed into Shellharbour council's current maintenance schedules, with "negligible impact" on the provision of services across the city, because additional income is expected through the kiosk "and other development opportunities".

Last December, council also voted to be appointed the trustee of Crown Land previously managed by the LIA with the exception of the bed of the lake and the entrance breakwaters.

They also resolved to further negotiate with NSW Crown Lands about the transfer of land at Reddall Reserve as free-hold land, and accept the assets situated on the transferred lands.

The Reddall Reserve Kiosk is situated on the waterfront. Kiosk proprietor and long-time Lake Illawarra resident Tony Carbone and his wife, Margaret, have run the business for two years.

Mr Carbone said maintenance of nearby toilet facilities was a "nightmare".

"The last long weekend, the toilets needed to be serviced - effluent was coming out of the toilet bowls," he said.

"The toilets need to be upgraded, and the shop needs to be made bigger.

"For a family with kids, the inability to swim here for most of the year [is an issue]. We also need more facilities like barbecues and more shade."

Mr Jones said he would explore grant opportunities and find ways to work co-operatively with the councils.

"This whole area, especially the zone up to Barrack Point, could be turned into a first-grade tourist spot," he said.