RED DOT DECISION SUMMARY VICTORIAN CIVIL …...This includes both the planning permit and all heritage permits. 8 When considering an application for a permit extension, the Tribunal

RED DOT DECISION SUMMARY The practice of VCAT is to designate cases of interest as ‘Red Dot Decisions’. A summary is published and the reasons why the

decision is of interest or significance are identified. The full text of the decision follows. This Red Dot Summary does not form part of the decision or reasons for decision.

VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL

ADMINISTRATIVE DIVISION

PLANNING AND ENVIRONMENT LIST VCAT REFERENCE NO. P340/2014

IN THE MATTER OF Hotel Windsor Holdings Pty Ltd v Minister for Planning

BEFORE Helen Gibson, Deputy President

NATURE OF CASE Extension of permit

REASONS WHY DECISION IS OF INTEREST OR SIGNIFICANCE

APPLICATION – significant, interesting or unusual use or development; application of policy, provision or principle; or circumstances

Application of the principles in Kantor v Murrindindi SC (1997)18 AATR 285 to an application for extension of a permit allowing redevelopment of the Windsor Hotel

SUMMARY

In 2010, the Minister for Planning, as responsible authority, issued a permit to allow redevelopment of the Hotel Windsor. The permit allowed part demolition of the existing hotel and construction of a new 26 storey tower and north wing extension. The permit was extended in 2012 and will expire if development does not commence by 10 January 2015. When considering an application for a permit extension, the Tribunal will take into account the following factors identified in Kantor v Murrindindi SC1:

whether there has been a change of planning policy; whether the landowner is seeking to warehouse the permit; intervening circumstances which bear on the grant or refusal of the

extension requests; the total elapsed time; whether the time limit originally imposed was adequate; the economic burden imposed on the landowner by the permit; and the probability of a permit issuing should a fresh application be made.

1 (1997) 18 AATR 285

VCAT Reference No. P340/2014 Page 2 of 23

In the present case, the fact that there has been a change in planning policy and a change to the planning controls specifically targeting the Bourke Hill precinct and the need to protect its low scale, which have resulted in the introduction of a mandatory height limit of 23 metres (well below the 93 metre development allowed by the permit), are very important factors that weigh strongly against a decision to extend the permit. The Tribunal has an obligation to determine this request based on accepted planning and legal principles, which should be consistent irrespective of the scale or sensitivity of a proposal. On balance, the factors in favour of extending the permit – no evidence of warehousing, intervening circumstances, the adequacy of the time limit and the implications of not granting an extension – do not outweigh the fact that planning policy and the planning controls have changed, in terms of specifically targeting this site and this development, and that no permit would or could be granted were a fresh application to be made today. Therefore, whilst appreciating the serious consequences for the Hotel, the request for extension of the permit is refused. Comments are also made about the failure of permit applicants for large developments to address the issue of a suitable time limit for their permit commensurate with the scale of the development and the number of additional consents, plans and permits required to actually get the development commenced.

VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL

ADMINISTRATIVE DIVISION

PLANNING AND ENVIRONMENT LIST VCAT REFERENCE NO. P340/2014

CATCHWORDS

Section 81(1) Planning and Environment Act 1987 – extension of time for commencement of a permit – application of Kantor criteria

APPLICANT Hotel Windsor Holdings Pty Ltd

RESPONSIBLE AUTHORITY Minister for Planning

SUBJECT LAND 103-137 Spring Street and 1-17 Bourke Street MELBOURNE VIC 3000

WHERE HELD 55 King Street, Melbourne

BEFORE Helen Gibson, Deputy President

HEARING TYPE Hearing

DATE OF HEARING 4 August 2014

DATE OF ORDER 19 August 2014

CITATION Hotel Windsor Holdings Pty Ltd v Minister for Planning (Includes Summary) (Red Dot) [2014] VCAT 993

ORDER

1 The decision of the responsible authority is affirmed.

2 Pursuant to section 85(1)(f) of the Planning and Environment Act 1987, I direct that the time within which the development described in Permit No 2009/001687A is to be started must not be extended and the time within which the development is to be completed must not be extended.

Helen Gibson Deputy President

APPEARANCES:

For Hotel Windsor Holdings Pty Ltd

Mr Chris Canavan QC, instructed by Norton Rose Fulbright. He called the following witnesses:

Glenn Coupar, Development Manager, Halim Group

David Perry, Chief Executive Officer, Hotel Windsor

Stuart McGurn, town planner, Environmental Resources Management Australia Pty Ltd (ERM)

For Minister for Planning Ms Susan Brennan SC and Mr Ian Munt of counsel, by direct brief

INFORMATION

Description of Proposal Extension of permit for redevelopment of the Windsor Hotel

Nature of Proceeding Application for review under section 81(1) of the Planning and Environment Act 1987

Zone and Overlays Capital City Zone Schedule 1 Outside the Retail Core (CCZ1)

Design and Development Overlay - Schedule 1 Active Street Frontages – Capital City Zone (Area 2) (DDO1-A2)

Design and Development Overlay - Schedule 3 Traffic Conflict Frontage – Capital City Zone (DDO3)

Design and Development Overlay – Schedule 62 Bourke Hill (DDO62)

Heritage Overlay – Schedule 500 Bourke Hill Precinct

Heritage Overlay – Schedule 739 Hotel Windsor

Parking Overlay – Schedule 1 Capital City Zone – Outside the Retail Core (PO1)


Land Description The Windsor Hotel is an important building of architectural and historic significance located on the corner of Spring Street and Bourke Street in the central city area of Melbourne. The Hotel is known as No 103 to 137 Spring Street and No 1 – 17 Bourke Street and occupies the sub-block bounded by Spring Street, Little Collins Street, Windsor Place and Bourke Street. It has an area of approximately 3582m2.

The historic 19th century five storey hotel building has a frontage to Spring Street and Little Collins Street. The Hotel also includes a five storey building on the corner of Spring and Bourke Streets. The Hotel presently comprises 180 rooms of accommodation, as well as a grand ballroom, dining room, pre function area, bar, lobby lounge, reception and back of house facilities.

Cases Referred To Windsor Hotel Holdings Pty Ltd v Minister for Planning [2012] VCAT 1203 (13 August 2012)

National Trust of Australia (Victoria) v Minister for Planning [2010] VCAT 671

National Trust of Australia v VCAT & Ors [2010] VSC 430

Kantor v Murrindindi SC (1997)18 AATR 285

Naroghid Wind Farm Pty Ltd v Minister for Planning [2013] VCAT 675



REASONS

WHAT IS THIS PROCEEDING ABOUT?

1 In 2010, the Minister for Planning (Minister) as responsible authority, issued a permit2 to allow redevelopment of the Hotel Windsor. The permit allows:

Development of a residential hotel comprising part demolition of existing hotel and construction of a new 26 storey tower and north wing extension.

2 The circumstances surrounding the grant of the permit were controversial from both a political and a planning perspective. In planning terms, the height of the redevelopment was the primary concern. The new 26 storey tower substantially exceeds the 23 meter discretionary height limit applicable to the Bourke Hill precinct.

3 The permit had an expiry date of 4 November 2012 (if development was not started) or 4 November 2014 (if development was not completed).

4 In 2012, the Tribunal extended the time within which the development described in the permit was to be started to 10 January 2015 and the time within which the development was to be completed to 10 January 2017.3

5 The applicant, Hotel Windsor Holdings Pty Ltd (the Hotel), has now applied for a second extension of the permit requesting an extension of the time for commencement of development to 3 September 2016 and for completion to 3 September 2018.

6 Whilst this proceeding is an application to review the failure of the Minister to grant an extension, the Minister opposes the extension and submits that the Tribunal should refuse the Hotel’s application for the following reasons:

There has been a change in the planning policy since the permit was last extended which shifts the balance of planning considerations in favour of protection of Bourke Hill as a low scale precinct;

There has been a change in the planning controls since the permit was last extended which would prohibit the issue of a permit for the proposed development were a fresh application to be made today;

The Hotel’s failure to commence the development since the previous extension of time is due to its failure to prepare plans in a timely fashion that were capable of obtaining permission under the Building Act 2006;

The Hotel has had sufficient notice of its building permission issues to take adequate steps to mitigate any economic burden associated with commencing the development on or before 10 January 2015; and

2 Planning Permit 2009/001687A issued 4 November 2010 3 Windsor Hotel Holdings Pty Ltd v Minister for Planning [2012] VCAT 1203 (13 August 2012)


Given the Hotel’s professed ability to commence development by 10 January 2015, there is no significant financial burden on the Hotel associated with refusing an extension.

7 For its part, the Hotel submits that given –

the delays associated with resolving issues associated with the inconsistencies between the issued heritage and planning permits, and in particular resolving issues raised by the Melbourne Fire Brigade (MFB); and

the delays caused by the need to apply for a further heritage permit necessary to facilitate the development contemplated in the planning permit,

the time limit proposed on the planning permit has proven to be inadequate. The Hotel submits there is no objective reason why the planning permit should not be extended. The ability to finalise funding approval for the schematic, detailed design, tender and construction documentation and actual construction requires that all permits (and endorsed plans) are in place. This includes both the planning permit and all heritage permits.

8 When considering an application for a permit extension, the Tribunal will take into account the following factors identified by Ashley J in Kantor v Murrindindi SC4:

whether there has been a change of planning policy;

whether the landowner is seeking to warehouse the permit;

intervening circumstances which bear on the grant or refusal of the extension requests;

the total elapsed time;

whether the time limit originally imposed was adequate;

the economic burden imposed on the landowner by the permit; and

the probability of a permit issuing should a fresh application be made.

9 These factors are not definitive or exclusive. They provide guidance on the matters to consider in light of the circumstances applying to the application in question, but they also allow for other relevant matters to be taken into consideration.

10 In many respects, this proceeding involves no more than a straightforward application of the Kantor criteria. The complicating factors are the controversial circumstances surrounding the original grant of the permit, and the implications for the Hotel if the permit is not extended. I will deal with each of these matters after I have considered the Kantor criteria.

4 (1997) 18 AATR 285


WHAT IS PROPOSED?

11 The redevelopment proposal allowed by the permit comprises four elements:

Retain parts of the Victorian hotel building (the ‘original building’) facing Spring Street and Little Collins Street with internal refurbishments and external alterations.

Demolish the rear section of the Victorian hotel building fronting Windsor Place and construct a new 26 storey tower on Windsor Place approximately 93.50 metres in height.

Replace the 1960’s building on the corner of Bourke and Spring Streets with a new seven storey ‘corner building’, which also exceeds 23 metres in height.

Construct a services and recreation ‘stick’ on the new corner building that would project over Windsor Place.

12 The renovation of the original building and the new tower and corner building will result in the establishment of the Hotel Windsor as a world class five star luxury hotel. The number of guest rooms will be increased from 180 to 332 rooms.

BACKGROUND INFORMATION ABOUT THE GRANT OF HERITAGE AND PLANNING PERMITS

13 The Hotel Windsor is a significant heritage building in Melbourne. Its significance is recognised by its inclusion on the Victorian Heritage Register. When a heritage place is included on the Victorian Heritage Register, a heritage permit is required under the Heritage Act 1996 but no permit is required under the Heritage Overlay of the planning scheme5. Whilst redevelopment of the Hotel also required a permit under other provisions of the planning scheme (notably under the Capital City Zone and the Design and Development Overlay), the permit application was exempt from third party notice and review rights.

14 To gain public input to his decision making process, the Minister established an advisory committee6 to advise him on all relevant matters concerning the planning permit application for the redevelopment of the Hotel Windsor. The Advisory Committee was given terms of reference, which included a range of matters some of which fell outside the ambit of matters that would normally be considered as part of a planning permit application. Height was a key issues raised in submissions to the Advisory Committee. This was because the height of the proposed tower and corner

5 Clause 43.01-2 Melbourne Planning Scheme 6 Under section 151 of the Planning and Environment Act 1987


building both exceeded the discretionary height limit of 23 metres in DDO2.7

15 The Advisory Committee recommended that a permit be granted subject to conditions. It found that:

1. In terms of the impact of the proposal on the Bourke Hill Precinct as a whole, the values which form the significance of the precinct are not fundamentally altered.

2. The height and massing of the proposal are generally appropriate in the context and in terms of the planning objectives for the area.

3. Doing nothing will only see the hotel and the building decline.

4. The hotel is unlikely to be refurbished under the existing permit, and a development within the ‘preferred’ height limits will not be viable.

5. At least 300 rooms together with conference and leisure facilities are required to allow the project to be economically viable and operate at a 5-star standard.

6. The development as proposed is an economically viable scheme that could attract bank finance.

16 The Minister granted a permit on 4 November 2010. The grant of the permit was surrounded by considerable political controversy. The National Trust attempted to appeal on heritage grounds, saying that the exemption under the Heritage Overlay from the need for a permit because the Hotel Windsor is on the Victorian Heritage Register did not extend to its inclusion in the Heritage Overlay as a part of the Bourke Hill Precinct (HO500). The Tribunal rejected this argument and held that the exemption from the need for a permit in clause 43.01-2 applied to both the individual listing of the Hotel Windsor in HO739 as well as its inclusion in the broader Bourke Hill Precinct in HO500.8 The National Trust unsuccessfully appealed to the Supreme Court, which upheld the Tribunal’s decision.9

17 The grant of the planning permit in November 2010 followed the issue of a heritage permit on 13 March 2010. In total, there have been three heritage permits issued.10 Plans have been endorsed under the various permits. In January 2012, the MFB refused a Regulation 309 application11 on a number of grounds. During 2012 the Hotel negotiated with the MFB with the result that in late 2012, the MFB approved plans, which included the removal of the existing wooden floors and lathe and plaster ceilings of the building, to be replaced with concrete and steel floors. This led to a new Regulation 309 application in December 2012, which was consented to by the MFB on

7 DDO2 was the relevant planning control applying to the land at this time 8 National Trust of Australia (Victoria) v Minister for Planning [2010] VCAT 671 9 National Trust of Australia v VCAT & Ors [2010] VSC 430 10 P14689, P17377 and Heritage Permit 19951 11 Required under the Building Regulations 2006

19 February 2013. However, the extent of the works required to satisfy the MFB and the impact on the heritage structure that replacement of the timber floors with concrete floors would have, led to Heritage Victoria requiring that a further heritage permit be applied for. This further heritage permit (19951) was not issued until 3 September 2013.

18 The complexity of integrating and obtaining all necessary approvals under the Planning and Environment Act 1987, the Heritage Act 1995 and the Building Act 2006 have been time consuming and complex. This is evident from the chronology submitted by the Hotel with this application for review, which I have included in Appendix A.

APPLICATION OF THE KANTOR CRITERIA

Has there been a change of planning policy?

19 When the Tribunal previously considered the first application for extension of the permit, there had been no change to the planning policy framework since the permit was first issued. That situation has now changed.

20 On 12 September 2013 a revised Local Planning Policy Framework was introduced by Amendment C162. Clause 21.12, which deals with the Hoddle Grid, now provides under the heading “Built Environment and Heritage”:

Protect the scale of important heritage precincts, boulevards and other unique precincts that rely on a consistency of scale for their image, including the Retail Core, Chinatown, Hardware Lane, Flinders Lane, Bourke Hill, Parliament, the Melbourne Town Hall, and the churches on Flinders and Collins Streets. (Tribunal emphasis)

21 Clause 22.04, which deals with heritage places within the Capital City Zone, includes a separate section on the Bourke Hill precinct. It sets out a statement of significance, which concludes with the statement:

The juxtaposition of the Parliament, the former deprived areas of Little Bourke Street and the style of Bourke Street gives the precinct an unrivalled historic texture and overall the theatres, hotels, cafes and quality bookshops contribute to the relaxed and elegant character of the eastern end of the city.

Key Attributes

Low-scale Victorian buildings.

The visual dominance of the parliamentary buildings on the Bourke Hill skyline, and the vista along Bourke Street to Parliament House.

22 On 19 May 2014 the Minister released Plan Melbourne: Metropolitan Planning Strategy (Plan Melbourne). On 30 May 2014 Plan Melbourne was referenced in the Victoria Planning Provisions (VPP) in place of Melbourne 2013 and Melbourne 2030: A planning update Melbourne @ 5



million.12 Clause 9 of the State Planning Policy Framework now provides as follows:

Plan Melbourne interpretation

Any references in this scheme to Melbourne 2030 (Department of Sustainability and Environment, 2002) and Melbourne 2030: A planning update Melbourne @ 5 million (Department of Planning and Community Development, 2008) are to be disregarded. Where relevant, planning and responsible authorities must consider and apply the strategy Plan Melbourne: Metropolitan Planning Strategy (Department of Transport, Planning and Local Infrastructure, 2014).

23 Initiative 4.2.3 in Plan Melbourne directly addresses the precinct in which the Windsor Hotel is located, being the Bourke Hill precinct. It provides as follows:

… However, increasing the density of parts of the expanded central city must be balanced by protecting areas that are sensitive from development which may compromise the values held by the community for those areas.

In the short term

Implement planning provisions for mandatory height controls in and around appropriate central city locations such as the Bourke Hill precinct and East Melbourne.

24 Consistent with Initiative 4.2.3 in Plan Melbourne, on 27 June 2014 the Minister approved Amendment C237 to the Melbourne Planning Scheme. Amendment C237 amended the scheme by modifying schedule 2 to the Design and Development Overlay, which removes the Bourke Hill Precinct from DDO2, and inserting a new schedule 62 to the Design and Development Overlay, which includes the Bourke Hill Precinct. Taken together, these changes impose a mandatory height limit over the subject land compared to the discretionary height limit, which previously applied. The subject land is included in height control area A213, which has a maximum building height of 23 metres. The outcomes to be achieved for Area 2 are that:

“The Parliamentary buildings remain dominant on the Bourke Hill skyline.”

25 The overall design objectives for Bourke Hill set out in DDO62 are as follows:

Design objectives

To protect sunlight access to key public places and open space areas so as to provide a comfortable, pedestrian-friendly urban environment.

12 Amendment VC106 13 Table 1 to schedule 62 of the Design and Development Overlay

To ensure that the height of new buildings reinforces the built form character of unique areas.

To maintain the visual dominance of Parliament House and other prominent landmarks.

26 The mandatory height controls of DDO62 cease to have effect after 27 June 2015. In the Explanatory Report for Amendment C237 the Minister gave the following reasons for the amendment:

The Bourke Hill area is identified in the Melbourne Planning Scheme at Clause 21.12 and Clause 22.04 as an important heritage area and a precinct which relies on a consistency of scale for its unique character. Recently planning applications have been made for buildings in the Bourke Hill area which has highlighted the need for a review of the built form controls to protect this significant precinct of Melbourne.

The amendment will ensure that new development is consistent with the long term vision to protect the heritage significance and low scale of Bourke Hill while an amendment to introduce permanent controls undergoes a separate process.

27 Mr McGurn, who gave planning evidence on behalf of the Hotel, sought to downplay the extent of change to the planning policy framework. For example, he noted that the design objectives of the overlay schedule and the design outcome for the particular height control area are the same as those considered by the Advisory Committee.

28 However, I consider there has been a significant shift in planning policy affecting the subject land. A clear intent has been evidenced in clause 21.12, in particular, to protect the scale of the Bourke Hill precinct. This policy intent has been repeated explicitly in Plan Melbourne. In turn, it has been given statutory effect by the introduction of DDO62, which imposes mandatory height limits rather than discretionary height limits for Bourke Hill. The Explanatory Report for Amendment C237 makes it clear that planning applications which exceed the height limit, an example of which is the Windsor Hotel proposal, have been a trigger underlying the changes to the planning policy and planning controls.

29 In my view, the changes to the planning policy framework and the planning controls since the permit was first granted and then subsequently extended is a significant factor weighing against an extension of the permit.

Is the landowner seeking to warehouse the permit?

30 I agree with the position taken by the applicant and the Minister that there is no evidence that the Hotel is seeking to warehouse the permit. The Hotel has undertaken consistent steps which are necessary or desirable precursors to commencement of the proposed development. There is no evidence that the Hotel is seeking to keep the permit alive in order to dispose of the property, but fully intends to act on the permit itself. This is a factor that favours an extension.


Are there intervening circumstances which bear on the grant or refusal of the extension request?

31 I accept that the need to seek multiple heritage permits has been a delaying factor in enabling the redevelopment to commence. This need was a significant factor in the Tribunal’s decision in 2012 to extend the permit for a first time.

32 Subsequent to that extension, the applicant submits there have been two key intervening circumstances which have necessitated this further request for an extension:

The need to redesign the development to obtain the approval of the MFB (most notably, the decision to replace the existing wooden floors with a concrete and steel structure); and

Heritage Victoria’s decision that the redesign required a fresh heritage permit application (due to the impact on the existing heritage fabric given the proposed removal of the existing wooden floors), and the process of obtaining a fresh heritage permit.

33 Glen Coupar gave evidence on behalf of the applicant about the lengthy process during 2012 when the development was redesigned having regard to the requirements of the MFB.

34 I found this evidence somewhat confusing as to exactly when the Hotel first fully realised that it would be required to replace the wooden floors in order to meet MFB requirements. I note that the MFB refused the first Regulation 309 application in January 2012, which was some six months before the Tribunal determined to extend the permit. It does not appear from the Tribunal’s decision that this was a factor relied upon by the Hotel as part of that proceeding. Nevertheless, as a result of negotiations between the Hotel and the MFB during the course of 2012, the MFB finally agreed to plans, which addressed its fire safety concerns. However, the need to replace the existing wooden floors with concrete and steel floors led to Heritage Victoria requiring a fresh heritage permit to be applied for. It took until September 2013 for that permit to be issued.

35 The Hotel says that until this permit was issued, it was unable to fully develop the schematic design process for the interior design. In addition, there are further investigations, permits and documentation required before the project can get underway. They include:

Auditing and structural investigations;

Demolition permit;

Project documentation, including completion of the financial analysis and finalising the funding arrangements; and

Construction of prototype suites.


36 According to Mr Coupar, the completion of all the necessary preliminary steps, if undertaken in an orderly and consecutive fashion, could take until July 2016 before the Hotel is ready to commence major demolition of the north building.

37 The Minister submitted that the delays associated with negotiations with the MFB and then the need to obtain a further heritage permit are attributable to the Hotel, rather than being true intervening circumstances beyond the Hotel’s control. The Minister submitted that from mid-2011, the Hotel knew that the proposed design of the building could not receive permission under the Building Act because it did not satisfy the MFB. It was open to the Hotel to pursue a determination from the Buildings Appeals Board in respect of its design, but it chose not to do so. These circumstances were known to the Hotel when it last sought an extension of time in mid-2012, but were not disclosed then. If the matters were known but not regarded as a source of delay in mid-2012, it is difficult to accept that they are now a valid justification for additional time.

38 It is not my role to make findings about whether the Hotel could have acted with greater expedition in coordinating and obtaining all the consents and permits it required. Perhaps the Hotel was slow to realise all the implications associated with its failure to obtain the consent of the MFB in early 2012 to its proposed plans. Nevertheless, the circumstances that the Hotel relies upon to justify this latest extension, namely the requirements of the MFB and the need for a third heritage permit, were not entirely unknown at the time of the last extension. These factors, and the numerous other permissions, plans, investigations and documentation that will be required before development commences, have always been part of the planning process necessary to get the development started. They cannot be described as ‘unexpected’ circumstances that have intervened since the last permit extension was granted.

39 I accept that there were intervening circumstances between the original grant of the permit and the time of the first request, which supported an extension. I also accept that there have been intervening circumstances subsequently, which have led to delays in commencement. But because I am not persuaded they were completely unknown at the time of the last request or unexpected, I find that although these factors would support the grant of the extension request, I do not give them great weight.

Was the time limit adequate?

40 The total elapsed time since the permit was first granted until its current expiry date if the development is not commenced is four years and two months.

41 When the permit was first extended, the Tribunal found that the time limit originally imposed of two years was inadequate. However, when the first extension request was made and knowing of the delays and complexities



associated with integrating all the necessary permissions required to commence development, the Hotel only requested an extension for a further two years. In fact, the Tribunal extended the permit by two years and two months.

42 I endorse the comments of the previous Tribunal that for such a major project, the initial time limit of two years was not adequate.

43 It is most unfortunate that permit applicants for large developments frequently fail to address the issue of a suitable time limit for their permit commensurate with the scale of the development and the number of additional consents, plans and permits required to actually get the development commenced. When permit applicants fail to realistically assess the length of time they will require to commence use or development under a permit, it exposes them to the risk of changes in the political climate and changes to planning policy or controls by the time they come to need an extension of time. Policy and planning controls are not static, especially where use or development have been controversial, and changes to them are particularly important factors in determining whether to extend a permit.

44 Planning permits confer valuable rights, which the Planning and Environment Act 1987 and planning schemes protect, albeit for a defined period of time. There are sound reasons for imposing time limits on planning permits. As Ashley J explained in Kantor:14

Development would not likely be facilitated by a permit in respect of which no time for expiry was fixed, and which then lay dormant for a protracted period. … Moreover, under the Act development is to be facilitated in accordance with the objective of fair, orderly, economic and sustainable use of land. Grant of a permit without any period within which action to implement it need to be taken would run counter at least to the notion of orderly development. Again, it is apparent that planning policy is not set in stone. Grant of a permit for use or development which had no expiry date would unnecessarily open up the prospect of delayed use or development at odds with changed planning policy …

45 On the other hand, it is important that initial time limits are appropriate and adequate, otherwise needless resources will be expended in seeking necessary extensions of time.

46 In the present case, I consider that the initial time period of two years was inadequate, but that the extended period of four years and two months was not unreasonable. If the Hotel considered that this time period was unreasonable when the first extension was applied for, it should have requested a more realistic time frame, especially when it was aware that the MFB was not satisfied with its plans from a fire safety perspective.

14 (1997) 18 AATR 285 at 313


47 Notwithstanding the additional work still to be undertaken before development commences, which ideally Mr Coupar indicated would be about July 2016, the Hotel has said it will commence development under the permit by the expiry date of 15 January 2015 if the permit is not extended. There will be problems associated with this and it is not the Hotel’s preferred option. These are matters I will address later.

48 On balance, when considering the question of time based on the Kantor criteria, I consider that the total elapse of time from the date the permit was first granted was not unreasonable, although as events have transpired, the time limit was not generous and ideally should have been longer. This is a factor that weighs in favour of an extension, but because of the Hotel’s failure to request a realistic extension of time in 2012 when it was aware of some of the problems (at least) with its plans, I do not give this factor great weight.

Has there been an economic burden imposed on the landowner by the permit?

49 The applicant has expended a total of $7.19 million since 2009 on various reports, preparation of plans, design and permit processes. More expenditure will be required to bring the development to a point where it is ready to commence.

50 I do not consider that the permit has imposed an unreasonable economic burden on the landowner. The total cost of the redevelopment was estimated at around $130 million.15 In the context of the scale and complexity of the development given its heritage significance and the need to meet requirements under the Planning and Environment Act 1987, Heritage Act 1995 and Building Act 2006, I do not consider that the amount of money expended to date on meeting the permit requirements or still to be expended is disproportionate or excessive. I therefore do not consider that the economic burden imposed on the landowner by the permit is a factor that weighs in favour of granting the extension.

What is the probability of a permit issuing should a fresh application be made?

51 There was no dispute by the parties, and I so find, that were a fresh application to be made today for the redevelopment proposal, a permit would not be granted. The change in the planning controls by the introduction of a mandatory height limit under DDO62 means that a permit cannot be granted to vary the maximum building height of 23 metres.16

15 Advisory Committee Report: Melbourne Planning Scheme Permit Application 2009/1687 Hotel Windsor (February 2010) section 8. This estimate was made in 2010 and is now likely to be much higher. The Minister’s submission quoted a reported figure of $325 million (“Hotel Windsor set for $325m makeover”, The Age, 1 March 2014). No cost of construction figure was quoted by the applicant in submissions or evidence that I can identify. 16 Clause 2.0 schedule 62 to the Design and Development Overlay

OTHER CONSIDERATIONS

Controversial circumstances surrounding the original grant of the permit

52 I have mentioned previously that there was both political and planning controversy surrounding the original grant of the permit. This controversy is not relevant to my findings or decision. However, the changes to the planning scheme and the explicit referencing of the Bourke Hill precinct in the local planning policy framework and Plan Melbourne in the context of an initiative to implement planning provisions for mandatory height controls in and around central city locations such as the Bourke Hill precinct, are indicative of a change in political views since the permit was first granted. Although Plan Melbourne was only released in May 2014 and DDO62 was only introduced in June 2014, earlier changes to planning policy in the planning scheme in 2013 and the Minister’s opposition to the first extension of the permit in July 2012, all indicate a change in political climate and lack of support by the Minister and Melbourne City Council for this proposal.

53 It might be thought that a prudent developer in the position of the Hotel would have recognised that a change to the planning controls relating to height limits was a possibility and that a further extension of the permit would be difficult. Maybe these factors should have alerted the Hotel to the need to expedite its planning and consent processes to avoid the position that the Hotel now finds itself in.

What are the implications for the Hotel if the permit is not extended?

54 Mr Coupar gave evidence about what would happen if the extension of time is not approved. The Hotel says that it can ‘force’ commencement by 15 January 2015 in the event that an extension of time to the commencement date is not granted. To this end, the Hotel has ceased taking bookings from 3 November 2014 as a precautionary measure. However, the ‘forced’ commencement will compromise the efficiency, cost effectiveness and potential quality of the overall development. It will also mean that the Hotel will be a construction site for a longer period.

55 Alternatively, if the Hotel is unable to commence construction by the expiry date, the Windsor Hotel will not be redeveloped to the standard or to the scale of what is proposed. The investment in advancing the project to date will be lost. Melbourne will lose the economic benefits that this proposal would bring in terms of construction and future business.

56 The stakes are therefore high for the Hotel. Nevertheless, I do not consider that I should grant an extension on the basis that if I don’t, the permit will be acted upon and the development will commence in any event, therefore there is nothing to be gained in not extending the permit and much to be lost. Rather, the decision rests on balancing all the factors for and against an extension.



CONCLUSION

57 When the Tribunal determined to extend the permit in 201217, it said:

[63] I am unable to conclude there are any compelling reasons to refuse to extend the time as requested. All permit holders are expected to commence and complete development within reasonable time periods and whilst there is not an expectation or any legislative indication that a permit will be extended common sense and reality are both of relevance.

[64] In reaching this conclusion I put great emphasis on there having been no change in the planning controls that apply to the subject site. I also take account of the recent considerations of Heritage Victoria in the granting of the Second Heritage Permit and the applicants’ persistence in finalising that application. I have also taken into account the recent endorsement by the Minister of the plans under the Permit and the need for integration of both planning and heritage permissions to ensure the proposed development is properly facilitated.

58 This situation has now altered in terms of a change in planning controls.

59 I have an obligation to determine this request based on accepted planning and legal principles, which should be consistent irrespective of the scale or sensitivity of a proposal. The issues of whether there have been changes in planning policy or planning controls since the grant of the permit and the probability of a permit issuing should a fresh application be made are important factors in making a decision. As I said in Naroghid Wind Farm Pty Ltd v Minister for Planning:18

[138] Planning permits are granted for specific proposals to be undertaken within a specific time frame. They are not intended to be a guarantee of adding value to land on an ongoing basis. For this reason, all planning permits are subject to expiry provisions either as specified in the permit itself or under the Planning and Environment Act 1987.

[139] Permits grant rights to use or develop land that continue for the life of the permit notwithstanding there may be changes to the planning controls. However, the expiry provisions mean that the ongoing appropriateness of permits can be re-evaluated from time to time in the light of changed circumstances and they also prevent permits from becoming stale. There is opportunity to extend a planning permit even if the use or development may now be prohibited, but the appropriateness of doing so must be weighed against a range of criteria. The Supreme Court in Kantor’s case has set out a summary of what are generally accepted to be the criteria that should be considered.

17 Windsor Hotel Holdings Pty Ltd v Minister for Planning [2012] VCAT 1203 18 [2013] VCAT 675

60 In the present case, the fact that there has been a change in planning policy and a change to the planning controls specifically targeting the Bourke Hill precinct and the need to protect its low scale, which have resulted in the introduction of a mandatory height limit of 23 metres (well below the 93 metre development allowed by the permit), are very important factors that weigh strongly against a decision to extend the permit. I do not consider that the temporary nature of the controls in DDO62 detract from the weight to be placed on these factors. Their temporary nature is intended to allow the introduction of permanent controls as part of a separate process. The Hotel will have an opportunity to input to that process. However, I must apply the controls as they are at the date of my decision. The fact that they contain a sunset clause does not affect their application before the date of their expiry.

61 When I balance the factors in favour of extending the permit – no evidence of warehousing, intervening circumstances, the adequacy of the time limit and the implications of not granting an extension – I do not consider that these factors outweigh the fact that planning policy and the planning controls have changed in terms of specifically targeting this site and this development, and that no permit would or could be granted were a fresh application to be made today. I also consider that the direction in clause 9.01 of the planning scheme, which provides that where relevant, planning and responsible authorities must consider and apply the strategy in Plan Melbourne, must be given considerable weight.

62 Therefore, whilst appreciating the serious consequences for the Hotel, I find that on balance the request for extension of the permit should be refused.

Helen Gibson Deputy President


APPENDIX A





Documents

RED DOT DECISION SUMMARY VICTORIAN CIVIL …...This includes both the planning permit and all heritage permits. 8 When considering an application for a permit extension, the Tribunal