Impact on the viability of other any business centres
51 Clause 61GB(3)(a) states that the council shall not grant consent to development for the purposes of a shop or commercial premises unless it is satisfied that:
the development will not detrimentally affect the viability of any business centre in the locality;
The SPSO does not define the word locality . This suggests that the makers of the LEP intended locality to change its meaning depending on the context in which it is used. (For example, when locality refers to visual impact, it means the area from which a proposal could be seen.) I note that in Boutros v Strathfield Municipal Council [2005] NSWLEC 605, Commissioner Bly considered locality to be smaller than the local government area; however that was in relation to a reception centre, which is not comparable to a DFO outlet of 14,000m2.
52 Mr Leyshon, Mr Rumbold and Mr Booth produced a joint report and gave concurrent evidence on the proposal's impact on the viability of business centres in the locality. Mr Leyshon took the term locality to mean Homebush and suburbs contiguous with it, no further than 4km by road. Mr Rumbold and Mr Booth defined locality as the area from which the DFO drew its customers. I am inclined to accept the wider definition. To do otherwise would be to assume that the makers of the SPSO were interested in protecting the viability of business centres only if these were located within 4km of Homebush. This makes no sense for a DFO centre that draws its custom metropolitan-wide. While a local council may regulate land use only within its area, this does not prevent it taking into consideration the impact of what happens within its boundaries on the wider metropolis. Indeed, a council would be accused of xenophobia, if it disregarded effects external to its boundaries.
53 There is another reason why I am not inclined to accept Mr Leyshon's narrow definition of locality. Based on a customer survey annexed to his report, he defined the existing DFO centre's trade area very widely. (As mentioned before, two-thirds of the customers came from beyond a 10km radius.) This allowed him to distribute the impact also widely. By defining locality as being within a 4km radius, he took into consideration only a small portion of the impact on other business centres.
54 The experts' disagreement on the meaning of "business centres" was of a more limited nature and, in my opinion, little turns on it. All three agreed that a centre zoned for business and commercial purposes was a business centre. Mr Leyshon and Mr Booth did not consider a planned centre, such as Westfield Burwood, to be a business centre. Mr Rumbold thought that Westfield Burwood was of sufficient scale and breadth of functions to be classed as a business centre in its own right. Everyone accepted that Birkenhead Point was a business centre, though Mr Leyshon did not accept it being in the locality.
55 While the experts disagreed on how impact on viability was to be measured, they agreed on the fundamental concept that, if competition led to the loss of a core retail or commercial function within a centre, such that its role in the centres hierarchy was threatened, that would constitute a detrimental effect on viability. Mr Booth pointed out that if there are already some vacancies in a centre, even a small increase in the number of vacancies could affect viability.
56 Mr Leyshon and Mr Rumbold agreed that it would not affect Westfield Burwood or other strip shopping centres nearby. Mr Booth disagreed. He thought that in many cases the DFO expansion could be the last straw for some retailers in particular centres.
57 Mr Rumbold's main concern was the impact on the Birkenhead Point Centre and Brand Smart at Parramatta. He thought the DFO directly competes with these two centres for both sales and tenants. The competition is heightened as the market for outlets becomes more saturated. Mr Rumbold thought that the DFO expansion could lead to a loss of outlet tenants in these two centres.
58 The experts disagreed on the percentage loss in turnover that would constitute detrimental impact on viability. Mr Booth said that a 5% decrease could sometimes be the straw that broke the camel's back. The other experts did not agree on a percentage figure. Given the persuasive nature of Mr Booth's evidence, I am inclined to conclude that an impact under 5% would not be detrimental to viability, an impact over 10% would usually be detrimental, and an impact between 5 and 10% would send warning signals.
59 Mr Leyshon's assessment of the impact on Birkenhead Point was 7%. Mr Leyshon agreed that this had been a struggling centre before being invigorated by becoming partially a DFO centre. Since only some of the shops are DFOs, it is reasonable to assume that the impact on DFOs would be more than 7%. This suggests that the DFO expansion at Homebush is likely to have a detrimental impact on the viability of Birkenhead Point.
60 It is difficult to come to precise conclusions on something as unpredictable as shopping behaviour. Two things, however, appear to be beyond doubt:
· the impact on Birkenhead Point should be taken into account; and
· when taken as a whole, the evidence suggests that the DFO expansion is likely to affect detrimentally the viability of Birkenhead Point.
61 I am strengthened in the above conclusion by two matters. The first is Table 24 in the customer survey attached to Mr Leyson's report, which shows that 42% of the Homebush DFO centre's customers had shopped at Birkenhead Point. The second is the common-sense notion that if one creates sixty to seventy new shops in an area, which, in the opinion of all the experts, is well served by retailing, someone somewhere will feel the effect.