Rangitīkei District mayor Andy Watson has apologised to former patients of the Lake Alice psychiatric hospital near Marton.
Watson attended on Saturday a blessing of the site, which closed in 1999, where he said sorry.
He told about 40 people gathered there Lake Alice was a "stain on the district".
"I gave an unreserved apology. There were certainly times when the community could have and should have known what was going on," he told RNZ on Monday.
"We weren't particularly welcoming as a community. A huge number of people from Marton worked out at Lake Alice. It was a principal employer of the day.
"There must have been a sense that all wasn't well. Whether there was a blind eye turned or whether people were just unaware, who knows."
The blessing was the idea of Paul Zentveld, a survivor from Lake Alice's child and adolescent unit in the 1970s.
A Royal Commission last year heard children in the unit were given electric shocks and paralysing drugs as punishments, and were subjected to sexual assaults.
Zentveld has fought for decades for recognition for survivors and, supported by the Citizens Commission on Human Rights, took a case to the UN Committee Against Torture, which two years ago ruled an investigation into abuse at Lake Alice was needed.
Shortly after that the Royal Commission into Abuse in Care announced it would investigate the unit.
The Rangitīkei District Council wasn't formed until local body amalgamations in 1989, but Watson said it took responsibility for what happened under its predecessors.
He was happy to have discussions about a possible memorial at the site, which is now privately owned.
"I would certainly be willing to take that conversation to council," Watson said.
"I offered my support as the leader of the district as mayor and for me personally to be able to help with recognition. Whether that's with the commission or whether it's towards a memorial, my door is open. I said, 'Come in and talk to me.'"
He had huge admiration for the tenacity of Zentveld and others who fought for former patients, he said.
Saturday's blessing had to take place on public land because the landowner didn't give permission for the gathering to take place on the former hospital site.
But Zentveld said it went well and fulfilled a wish from 50 years ago when he left Lake Alice the final time.
"It made my dreams come true."
He was looking forward to working on ideas for a memorial, and was thankful for the support of local iwi organisation Te Rūnanga o Ngā Wairiki Ngāti Apa and the Royal Commission, from which commissioner Paul Gibson attended.
Te Rūnanga o Ngā Wairiki Ngāti Apa chief executive Grant Huwyler said the organisation was approached by Lake Alice survivors last year to organise and lead the blessing.
Many iwi members and their families were former patients or had worked at Lake Alice.
"As an iwi we have been affected by a lot of Crown actions in our area and Lake Alice is no exception."
The commission's report into the Lake Alice unit is expected later this year.
After the third police investigation into the unit finished last year, former nurse John Richard Corkran was charged with ill-treating children. He has pleaded not guilty.