The conditions on the permit shall be the same as those appearing in the Notice of Decision with the following exceptions:

1 Condition 6 shall be deleted and replaced by the following:

6. The use hereby permitted shall not commence until the Owner of the lands comprised in the Certificate of Title entered an Agreement with the Responsible Authority pursuant to section 173 of the Planning and Environment Act 1987 that the carparking areas on the endorsed plans under this permit and permit P90/00, other than spaces in the hotel basement, shall be made available for use by patrons and staff of both the existing Freeway Sports Centre and the New Hotel without the written consent of the Responsible Authority and that the Owner will meet the reasonable costs of the preparation, execution and registration of the Agreement.

2 Add a further sub-condition to Condition 1 to read:

The building must be designed, constructed and maintained to limit traffic noise from the South Gippsland Freeway in accordance with clause 55.04-8 of the Planning Scheme to the satisfaction of the Responsible Authority.

1 This case is unusual in that one responsible authority is arguing that another responsible authority was wrong in its planning decision to issue a permit for a residential hotel. The focus was on strategic planning issues only.

2 Greater Dandenong City Council sought a review of a decision of Casey City Council which issued a Notice of Decision to Grant a Permit for a three storey corporate residential hotel at 5-17 Doveton Avenue in Eumemmerring.

3 The Greater Dandenong City Council opposed the issue on the basis that:

1. The proposal is inconsistent with the objectives and implementation of strategic State planning policies contained within Melbourne 2030.

2. The proposal is inconsistent with existing Casey Planning Scheme policies.

4 There was a second application for review by the permit applicant relating to Condition 6, but this was settled between the permit applicant and Casey City Council by a revision to the wording of that condition. Another condition required updating and a new condition is inserted by consent at the insistence of VicRoads accordingly these form part of the variation to Casey's decision.

5 Freeway Sports Centre Pty Ltd is seeking approval to use and develop a residential hotel. The plans show a rectangular three storey building with basement carpark. The hotel will incorporate 98 accommodation suites, restaurant café with capacity for up to 160 patrons, lounge bar, and a function room with capacity for 500 people. There will be about 326 car parking spaces some of which are shared with the adjoining Freeway Sports Centre establishment.

6 The subject site is located on the eastern side of Doveton Avenue, one property north of the Princes Highway in Eumemmerring. The site also has a side abuttal, but no access, to the South Gippsland Freeway. The site has an area of 16274 square metres and falls about 13.5 metres from its north-east corner to its south-west corner. The site is mostly vacant, save for 96 carparking spaces constructed on its southern boundary serving the adjoining sports centre and a transport depot. Vehicular Access is currently provided by an existing crossover to Doveton Avenue.

7 Surrounding area comprises a mix of commercial and residential uses. Land to the north comprises detached dwellings at conventional densities. Land to the immediate south is the Freeway Sports Centre which is a large sporting complex comprising unisex gym, ladies only gym, swimming pool, squash courts and related fitness facilities. Land to the west on the other side of Doveton Avenue is residential although to the south of this, on the Princes Highway, is a BP service station. Land further to the south, on the southern side of Princes Highway is a large industrial/commercial area, much of which comprised the old GMH automotive plant, this area is earmarked for redevelopment.

8 The subject site is located about 3km from the Dandenong CAD and about 3.5km from the Narre Warren Gate District Centre. The Princes Highway is the principal arterial road servicing both centres.

9 The subject site and all surrounding properties (except the freeway) are zoned Residential 1 under the Casey Planning Scheme. The relevant purposes of the Residential 1 Zone are:

•

To implement the State Planning Policy Framework and the Local Planning Policy Framework, including the Municipal Strategic Statement and local planning policies.

•

In appropriate locations, to allow educational, recreational, religious, community and a limited range of other non-residential uses to serve local community needs.

•

A permit is required under clause 32.01 for use and development of a Section 2 use (Residential Hotel) which is nested in the residential building section.

10 The South Gippsland Freeway and the Princes Highway are in a Road zone Category 1.

11 Clause 52.06 governs the requirement for car parking for the proposed development. The parking and access to the site were not at issue.

12 Clause 52.34, Bicycle Facilities, requires the provision of three bicycle spaces. A new sub Condition 1(e) now addresses this minor issue.

13 There are various planning controls and policies of relevance in this matter including:

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Clause 11 Matters for Consideration

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Clause 14.02 Metropolitan Development

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Clause 17 Economic Development

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Clause 17.01-2 Activity Centres

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Clause 17.02 Business

•

Clause 18 Infrastructure

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Clause 19.03 Design and Built Form.

•

Clause 21 Municipal Strategic Statement

•

Clause 65 Decision Guidelines

14 In addition Melbourne 2030 is the 'seriously entertained' strategic plan for the management of growth and change across Metropolitan Melbourne and the surrounding region. It reinforces the State-level policies contained in the Planning Scheme. Melbourne 2030 consists of 9 policy directions, the most relevant of which is Direction 1 which promotes 'a more compact city'. One of the means by which Melbourne 2030 proposes to achieve this is by restricting 'out-of-centre' development, that is, retail development outside nominated activity centres. It states:

Proposals for development or expansion of activities remote from activity centres will be discouraged by giving preference to locations in or on the border of an existing activity centre. Out-of-centre proposals will only be considered where it can be convincingly demonstrated that the proposed use or development is of net benefit to the community in the region served by the proposal.

15 Direction 1 of Melbourne 2030 sets the following objectives for out-of-centre developments:

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The avoidance of unreasonable impacts on the economic viability or social and cultural vitality of existing or proposed centres in the network.

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The location of out-of-centre developments on and accessible to the Principal Public Transport Network.

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A comparable proportion of work and visitor trips by public transport, compared to that achieved by similar uses located in activity centres.

•

A location in an existing cluster of out-of-centre developments (or adjacent to such an existing cluster if the site is already used for non-residential purposes), and improvement to the economic, social and environmental performance of that cluster.

16 There is also the draft "Activity Centres Implementation policy" of October 2002. Specifically it seeks:

Melbourne 2030 discourages out-of-centre development by giving preference to in-centre and edge-of-centre locations for new development. Such out-of-centre proposals will only be considered where it can be convincingly demonstrated that the proposed use or development is of net benefit to the community in the region served by the proposal. This is important if we are to create a more mixed-use environment in activity centres.

17 In August 2004, the draft "Out of Centre Retail Activity Assessment Criteria" was issued by the Department of Sustainability and Environment. The associated report by Ratio Consultants included that :

•

Out of Centre retailing provided a recognised and important component of modern retailing. It was recognised that on balance there were strong public interest arguments in maintaining high levels of choice in its wider sense for consumers;

•

The recommended approach for the application of assessment criteria in relation to Out of Centre retail development proposals has been drawn from the concept of net community benefit and was focused on a detailed reconsideration of component locational, amenity and sustainability criteria.

18 Clause 21.11 of the Casey Planning Scheme focuses on promoting local employment opportunities within the municipality in an attempt to combat the current limited employment opportunities. The MSS recognises that many of the residents within the city travel outside the municipality to work and that as a consequence, the facilitation of the growth and expansion of employment sites within the municipality will reduce the resultant personal and environmental costs.

19 The Tribunal was told that an Independent Panel had considered and recommended rejection of Amendment C53 to the Casey Planning Scheme. This amendment had sought a Mixed Use zone for the subject site together with the Freeway Sport Centre site to the south and land contained within the same title as this site which fronts onto Doveton Avenue but is excluded in this application. The rezoning would have enabled retailing, particularly on the land fronting Doveton Street (but which is excluded from this application). The Tribunal will refer to the Panel's findings later.

20 At the review hearing all parties tabled and read from detailed written submissions and supplemented these with oral presentations. There was detailed reference to Melbourne 2030 and the draft Implementation Policy for Activity Centres. All witnesses were available for cross-examination. Following consideration of all submissions I adjourned the matter to the following day and provided an oral decision with reasons. As this matter was of strategic importance to the three parties concerned, I consider it appropriate to provide detailed written reasons. There have been some minor changes for the purposes of clarity only, but otherwise the overall basis for the decision has not changed. My reasons are as follows.

21 Greater Dandenong City Council argued that the proposed use was an 'out-of-centre' facility, and as such, had no strategic support. Mr O'Brien argued that the stand-alone facility should be located in a major activity centre such as Dandenong or Narre Warren. He supported his arguments with detailed references to Melbourne 2030 and the following documents:

•

Draft Implementation Plan - Activity Centres

•

Linking Melbourne Metropolitan Transport Plan, to support the notion that utilising this site as an out-of-centre facility would be a poor strategic planning outcome.

22 I heard detailed debate about whether the proposal was an "out-of-centre" facility and there was extensive reference to the Panels report for Amendment C53 to the Casey Planning Scheme. It is noted the Panel recommended rejection of the amendment on strategic planning grounds. It had found the site was classified as an "out-of-centre" proposal. It had identified a number of shortcomings although it had found the residential hotel component of the proposal had merit.

23 Having heard from all parties and inspecting the site and surrounding neighbourhood I consider the proposed use and development to be appropriate for this location, having regard to:

(2) The purposes and provisions relevant to the Residential 1 zone.

(3) The attributes of the site's location, including its proximity to theist primary marketing the nearby industrial/commercial area.

(4) The lack of any apparent adverse amenity impacts on the neighbourhood including residential siting controls, car parking, access or operational issues.

The Draft Implementation Plans-Activity Centres Policy

24 I am not satisfied the proposal offends the draft Implementation Plans - Activity Centres Policy. This document does not have the same status as the overall Melbourne 2030 policy, but it does contain beneficial guidance on "out of centre" development. However I consider that its use as a determinative document in a case involving a residential hotel needs to be tempered with the understanding of:

•

The purpose of the facility proposed in this instance.

•

The site's location abutting two major metropolitan arterial roads.

•

The lack of a precise definition of 'out-of-centre' facilities.

•

The size of the facility proposed.

25 Even if I was to consider that this proposal is a fully fledged 'out-of-centre' facility I consider it is necessary to consider the particular benefits and disadvantages of the proposal. It is also noted that the draft policy does not prohibit out-of-centre facilities. Rather by its nature it should, where relevant, guide the exercise of discretion.

26 In this case the proposal is a relatively large residential hotel with ancillary conference, dining and bar facilities. It is not a retail facility. When examining the 'out-of-centre' policy directions these appear to be more focused towards retail, defacto retail or large commercial uses. It is silent on residential uses. Whilst this could be said to be a commercial use, it is a use which is anticipated in the Residential 1 Zone.

27 Furthermore even if it is to be called an 'out-of-centre' facility, it is, in relative terms, small and I have doubt that this is the scale of non retail "out- of-centre" facility anticipated in the draft policy.

28 I also remark that whilst the Panel for Amendment C53 found the components of the proposed Mixed Use zone, that is, the fitness centre, a new retail component and residential hotel, combined as a "out-of-centre" facility, that does not necessarily mean each individual use is an "out-of-centre" facility within the broad terms of the draft Implementation Activity Policy.

29 From my observation of the submissions by Greater Dandenong, too much emphasis was placed on this proposal as being as an "out-of-centre" facility, without actually providing any demonstrated evidence that the use or development was inappropriate.

30 Mr O'Brien was at pains to emphasise that it was up to the applicant for permit to demonstrate the residential hotel would not impact on nearby activity centres. He cited with Dandenong CAD in particular although gave some notional reference to Narre Warren. I note Casey City Council had no problem determining the relevance of this proposal in the State and Local planning policy hierarchy but Greater Dandenong held much firmer views. I consider that if the City of Greater Dandenong is to argue that a proposal is inappropriate in a strategic sense, it should have provided some detailed evidence of the true impact of the proposal on the major activity centres, such as Dandenong or Narre Warren. It is not sufficient to make broad, unsubstantiated assertions about the strategic implications of this proposal and simply rely on the draft Implementation - Activity Centres Policy and selected parts of Melbourne 2030 generally to preclude a legitimate proposal in an adjoining municipality.

31 I can well understand an independent Panel, which is examining a rezoning request for a larger parcel of land giving much greater weight to the draft Implementation document. I can also appreciate that it made findings about the proposal being an "out-of-centre" development. However the Panel was examining much broader issues including changing development rights for the site including the introduction of retailing. But that does not mean that I must give the draft Implementation Policy document the same weight as Melbourne 2030, the planning controls and existing policies within the Casey Planning Scheme.

32 In addition, Clause 11 of the Planning Scheme provides clearer scope for the responsible authority, and therefore the Tribunal, to balance planning objectives in favour of net community benefit. I will refer the panels findings and my own conclusions on this issue later.

33 Mr O'Brien referred to the extensive strategy work taking place to revitalise the Dandenong Activity Centre. The efforts of this Council should be commended in encouraging new development within its CAD. But I do not consider lodging an application for review of Casey City Council on strategic planning grounds necessarily helps its efforts to bring a residential hotel within its CAD.

34 Mr Hatley an experienced hotelier and the future operator of the hotel advised in evidence that he was not interested in developing a residential hotel in the Dandenong CAD because of a perception of safety and security deficiencies. This evidence was complemented by the evidence of Mr Couch who claimed that if the clientele or market was not prepared to visit the Dandenong Activity centre, the operators of residential hotels are not going to establish there. Whilst this may seem a harsh market reality these are legitimate reasons to avoid establishing in an area, at least until circumstances in the centre are more conducive for short term residential accommodation. Whether there are security, safety or even social issues which act as a disincentive to a residential hotel establishing in the Dandenong CAD we should not unnecessarily stifle a legitimate proposal which is responding to a demonstrated market establishing particularly when there are no demonstrated amenity or local planning policy concerns.

35 I acknowledge that the nomination of Dandenong as a Transit City, should, in a strategic sense be given some significant weight in encouraging a higher order of uses including major retail outlets, offices, entertainment and where possible residential accommodation, whether that is in high density housing or short term accommodation. But that should not necessarily prohibit a residential hotel from establishing outside the Dandenong CAD. If such was intended then the Planning Scheme or specific policies should say as much.

36 I am satisfied that the proposal meets all relevant local planning policies. The only matters Mr O'Brien could identify as a possible non-compliance with local planning policy related to Clause 22.07- Activity Centre Policies, and Clause 22.08 - Non-Residential Policies. However Clause 22.07 refers specifically to retailing. It makes no reference to residential hotels in activity centres. Similarly Clause 22.08 refers to non-residential uses. However this proposal is according to the nesting regime and definitions in the Planning Scheme a residential use. There are 98 bedrooms and ancillary features. The residential rooms take up a highest proportion of the floor area of this development. Whilst Mr O'Brien may have argued the residential and conference facilities can be separated, that is not the way the proposal was designed or presented in this application.

37 Unsurprisingly the proposal, even if the proposal was to be assessed under Clause 22.08, it would compare favourably, particularly in relationship to amenity considerations. Whilst it will not necessarily serve local residents, it will, by its very nature, serve the large industrial/commercial areas located immediately to the south of the Princes Highway. This industrial/commercial area is of such a large size that it is located in both municipalities. The relationship to this large industrial area is a notable positive aspect to consider when balancing the benefits/disbenefits of the proposal.

38 The Panel for Amendment C53 had already made findings that the residential hotel could provide a net benefit or to be more precise a net community benefit. However, irrespective of the Panel's findings, I am satisfied after hearing all the parties, examining the evidence, inspecting the site and surrounding locality and assessing the benefits, that is, the favourable location, the manner in which it responds to a particular market, consistency with local planning policy, no direct amenity impact and environmental constraints of the site. Accordingly the proposal has a number of benefits which substantially outweigh the City of Greater Dandenong's perceived strategic disadvantage of not being located in a major activity centre like Dandenong.

39 Mr O'Brien argued that the development did not provide a good level of sustainability. He based this on the notion that the activity centre of Dandenong would provide less reliance on private vehicle transport and greater reliance on public transport. Such an assertion was not supported by any qualified evidence.

40 I acknowledge the use is unlikely to rely on public transport. Staff of the residential hotel may utilise it, but the very nature of the use demands a high reliance on private car transport, whether that is a private vehicle, hire vehicle or taxis. In this regard I consider it would be unrealistic to expect this type of use to be forced to locate in an activity centre of the kind suggested by Mr O'Brien.

41 Even if safety, security and other social perceptions issues are addressed in Dandenong, there are some practical considerations related to the proposed use which needs to be considered. This includes having patrons of a residential hotel of the kind proposed in this application utilising the current suburban rail/bus network for most of their transport, particularly if the trip origins were outside the Dandenong CAD. It would seem unrealistic to expect the corporate traveller to change travel habits overnight and rely on public transport to the Dandenong CAD given the concerns raised by Mr Hatley and Mr Couch.

42 There is also the matter of convenience. The advantage of the subject site over the Dandenong CAD is strikingly obvious. This site is located immediately next to a direct link to the Melbourne CBD and Melbourne Airport, whereas a prospective patron of a hotel in the Dandenong CAD will need to travel through about six or seven sets of traffic lights along Stud Road and Foster Street after it exits the Freeway, not to mention the greater degree of congestion in the centre which will increase travel times.

43 On the other hand the proposal does offer a number of advantages to local, commercial and industrial operators who can take advantage of existing transport, freeway, access/abuttal, and other existing public infrastructure in the locality. There will also be synergies derived with other businesses such as the Freeway Sports Centre.

44 Mr O'Brien provided no real evidence to suggest any site would satisfactorily meet the needs of this end user. Whilst Mr O'Brien referred to approval of a Ramada Hotel in McCrae Street, this facility has not commenced use and it is noted it is located about 400 metres from the Dandenong transit station. Whilst in a general sense it may have substantially good public transport access I have substantial doubt that patrons of such premises would benefit much from the local rail or bus network. This is in contrast to uses such as offices or retail outlets which can utilise public transport. In this regard the current public transport network public transport is geared to tidal movements of commuters.

45 This is not to say Dandenong CAD is inappropriate for a residential hotel, rather as Mr Hatley and Mr Couch's evidence suggests, hotel operators of the kind in this application do not seem to be satisfied they can find a site in the CAD that meets their requirements.

46 The lodgement of objection to the application for permit by Greater Dandenong without proper grounds and the brief nature of the grounds for review could be said to be less than ideal, especially coming from a planning authority which is familiar with the planning permit and review process.

47 Whilst Mr O'Brien was able to demonstrate that Greater Dandenong had a genuine and legitimate planning concern with this proposal, the approach taken by the City of Greater Dandenong seems to do little for inter-municipal co-operation. Having regard to the size of the proposal and the knowledge that the use is a Section 2 (Discretionary Use) in the Residential 1 Zone, and the relevant policy framework affecting the site I am not sure this proposal was really the one to use as a test case on strategic planning issues.

48 For the above reasons the responsible authority's decision is varied. A permit shall issue generally in accordance with the responsible authority's Notice of Decision but with changes as agreed between the permit applicant and the responsible authority.