The Corner Brook Board of Trade says a mineral exploration company's decision to pull out their project application may have left a smudge on the city's reputation with other businesses.
There was a lot of outcry from the community to block the Thomas Resources project, which would have led to drilling near the city's watershed.
Corner Brook Board of Trade President Matthew Connolly said he was surprised that the company backed out.
"It looked to be a go. We're left holding an empty bag here with no information in it," he said.
According to Connolly, one way to ensure the public is getting enough information about possible development in their community is to get the city to openly share more information.
"The city knows about it, but the public doesn't know about it," he said.
"If we can get them to come forward and tell us all the good things that are happening here, it may deter similar businesses, but not everybody else."
Vaughn Hammond, the senior policy analyst for the Canadian Federation of Independent Business, said the long wait for development in Corner Brook may be forcing potential developers to look elsewhere.
"What we're hearing from our members is that there's a lot of issues with red tape," Hammond said.
"There's a lot of what one would describe as the regulatory system being onerous, and by that I mean there's a lot of delays in terms of applications for permits and licenses."
Hammond said some businesses may now be looking at nearby Deer Lake instead.
"The perception being created now is that the City of Corner Brook is not necessarily the best place to do business, and I think it's largely related to the whole red tape issue," he said.
"I don't think the impact that it has on business and economic growth in a city or a province can be understated."
However, Hammond said this situation has presented the city with an opportunity to open a line of communication with businesses who may be interested in developing in the area, and about how they can work to make it more appealing to companies.