I've always been intrigued with the idea behind this. I've tried searching the forums, but I can't really find much. As far as I know, Cormaris is a recently built fortification, it exists to balance out Ald Iuval and Ald Marak(?) at Lake Coronati, to give the impression of a heavily intertwined and contested border between the Redoran and Hlaalu territories and to reinforce the idea that House Redoran is not in good shape at all. As far as I can see, this idea was conceptualized somewhere in 2004 or earlier and hasn't really been properly challenged since. Please allow me to do so now.
I understand the reasons for Cormaris being here, as listed above. The thing is, none of these reasons are true justifications for a small fortress of Hlaalu architecture right in the heart of Redoran territory. Ald Iuval and Ald Marak have nothing to do with Cormaris. Cormaris is nowhere near the Hlaalu/Redoran border. Smacking down a foreign fortress in the heart of Redoran territory is a horrible overkill if it's purpose is to show Redoran's weakness. In fact, Cormaris openly laughs in the face of noble House Redoran. I'm perfectly okay with Redoran being beset from all sides, having trouble, barely holding on to their status as a faction of importance in Morrowind. That's a great idea. But Cormaris is not the right way of portraying this at all.
In discussing things, I've seen people bring up better justifications for Cormaris' existence. Some suggested an idea that I like a bit more - an EEC mining operation that was run by the Hlaalu. This is still not good enough, if you ask me. The EEC are in it for the profit. They're backed by the Empire. They don't need a Hlaalu fortress to hide in. They'd hire local mercinaries, the Redoran even, for protection.
In short, I see no good arguments in favor of Cormaris as a Hlaalu town, I see only downsides. It cheapens the Redoran experience, and is situated in a very illogical place, entirely disconnected from any other Hlaalu holdings. It is an open provocation to the weakened Redoran, yes, but not in a way that would be tolerated unless the Redoran were all dead and buried. The potential storytelling is in no way significant enough to tolerate this aberration and is in no way irreplaceable for the Redoran faction storyline and even less relevant to the Hlaalu storyline which is already loaded with interaction with the other factions through the Ald fortresses, their conflict with Indoril, and the increasing worship of the Imperial Cult among their members.
(I say it is replaceable, rather than irrelevant, to the Redoran. I like the idea of a weakened Redoran having to defend their territory from the Nords and the Hlaalu. But again, this can be conveyed in other, better ways than a Hlaalu fortress a few cells away from Baan Malur.)
So here's a solution. Cormaris becomes an Imperial town, like Caldera, or Raven Rock. Caldera, as you may recall, is an Imperial mining town in Redoran territory in vanilla, but the Governor's Hall is in fact full of Hlaalu NPCs. Similarly the EEC are in a joint venture with a Hlaalu noble (councilor?) who provides cheap mercinaries and guards. The EEC is in it for the money, are backed by the Empire and the Duke, so they can get away with such an intrusion on Redoran territory, even though the Reds don't like it one bit. The Hlaalu are in it because while their monetary gains are not immense, they gain a ton of influence in the region through this forward base.
Storywise, I think this is a way better idea than the original one. There will still be a big Hlaalu influence for the Redoran to worry about, but this time it's not as much of an abomination. Architecture-wise, this is a nice excuse to build a small town using Raven Rock pieces.
And please don't say Cormaris is a good idea because it's an old idea, or because it's a Sload idea (I'm not sure if it is, but I'm sure he has probably agreed with it at one point). While some old ideas are still good today, and Sload is a genius, Cormaris being a recently built Hlaalu fortress, in my opinion, is more like the idea of all Dres councilors being vampires - also an idea that people once thought was good, now one that should be purged or adapted to fit our current ideas and standards.
Thoughts?
edit: I agree with everything Adanorcil wrote below.
