Hobsons Bay council has rejected a request to borrow nearly $2million to help fund Williamstown Football Club’s $6million redevelopment plans, saying it would contradict its problem gambling policy.

The club asked the council to enter into a community bond or low-interest state government loan for $1.957million to improve the Williamstown Cricket Ground.

The club proposed that it and the council would each service half of the loan.

Its plans included more changerooms, amenities, doctors’ and massage rooms, offices for the club’s and Western Jets’ staff, lighting upgrades, a commercially-operated gym, medical centre and a cafe.

The council passed a resolution at last week’s meeting which stated: “the funding model does not align with council’s funding priorities and that council will not enter into a community bond to fund the proposal”.

A report tabled at Tuesday’s council meeting stated the funding proposal contradicted the council’s problem gambling (electronic gaming machines) policy, which states “council will not provide funding, grants, sponsorship or other resources for any activities that promote gambling”.

“The Williamstown Football Club operates Seagulls Nest which has 66 electronic gaming machines,” the report stated.

“EGMs are the WFC’s primary source of revenue.

“Losses in 2016-17 at the Seagulls Nest were $6.9million, the second highest of all gaming venues in Hobsons Bay.”

Cr Jonathon Marsden told last week’s council meeting that councillors were “somewhat hamstrung by their policy position”.

“Our community grants guidelines from 2017 disallow eligibility for funding for organisations that derive income from gambling,” he said.

However, the council resolved to work with Williamstown Football Club and Williamstown Cricket Club to identify opportunities for additional amenities at the ground.

Upgrading the floodlighting has been included in this year’s council budget with works expected to start in October.

The club announced on Friday it had received a commitment for $273,000 from AFL Victoria towards developing “appropriate changeroom and match day facilities befitting women participants, VFL standards and broader community users”.

“We look forward to working closely with council,” it said in a statement.