1. Pursuant to section 127 and clause 64 of Schedule 1 of the Victorian Civil & Administrative Tribunal Act 1998, the permit application is amended by substituting for the permit application plans, the following plans filed with the Tribunal:

1. The decision of the Responsible Authority is affirmed. In permit

Mr John Cicero and Ms Sarah Raso, Solicitors of Best Hooper Solicitors

A 35 storey mixed-use tower (accommodating hotel, restaurant, commercial tenancies and dwellings) rising from within the retained exterior of the existing Moderne building on the land.

Application under section 77 of the Planning and Environment Act 1987 to review a decision to refuse a permit

The subject land is a regular lot located on the west side of Wills Street between LaTrobe and A'Beckett Streets in central Melbourne. The land is developed with a two-storey Moderne style warehouse/factory building, constructed in 1937 for the Victorian Printing Works. The land has a frontage to Wills Street of approximately 18 metres and an area of approximately 710 square metres.

1. This is an application to review the decision of the responsible authority to refuse permission for a 35 storey mixed-use tower (accommodating hotel, restaurant, commercial tenancies and dwellings) rising from within the retained exterior of the existing Moderne building at 17-23 Wills Street, Melbourne. The responsible authority issued a Notice of Refusal to Grant a Permit. Ms Collingwood submitted that:

In summary, the responsible authority submits that the proposal will give rise to unreasonable amenity impacts to both adjacent residential dwellings and the public realm by reason of its excessive height and lack of setbacks. The proposal provides poor amenity for future residents and will detract from the significance of the heritage building.

1. For reasons set out below we ultimately decide that no permit should be granted, primarily because we do not think that we can be satisfied that measures employed in the amending plans to reasonably preserve the amenity of affected apartments in the building to the north are sufficient. We are also concerned that the amending plans do not represent a sufficiently resolved architectural solution.
2. At the commencement of the hearing Mr Cicero applied to amend the permit application by the substitution of amending plans as foreshadowed by notice given in accordance with the Tribunal's practice requirements. No person opposed the amendment of the permit application in this way, and the Tribunal ordered the amendment of the permit application in accordance with Mr Cicero's request.
3. The parties and the witnesses at the hearing of the application for review relied on both written and oral submissions and a number of photographs, plans and other documents were tendered to the Tribunal. The Tribunal inspected the subject land and its locality. This included an inspection of two dwellings within the neighbouring apartment tower to the north.

1. The subject land is a regular lot located on the west side of Wills Street in central Melbourne. The land adjoins Singers Lane to its south and west boundaries. The land is developed with two-storey Moderne style warehouse/factory building, constructed in 1937 for the Victorian Printing Works[1]. The land has a frontage to Wills Street of approximately 18 metres and an area of approximately 710 square metres.
2. Wills Street is a short through street that extends between LaTrobe and A'Beckett Streets. The street environment has been redeveloped with wide footpaths, street furniture, bicycle racks and street trees, creating a pleasant pedestrian focused space.

1. The site is located within the Central Activities District and is proximate to the Flagstaff Gardens, Flagstaff train station, Victoria Market and a range of conveniences and facilities associated with its central city location.
2. To the north of the land is a 25 storey residential development known as Wills Court, in part built within the exterior façade of the former Telephone Exchange building[2].
3. To the east across Wills Street is Wills Tower, a 26 level apartment building. To the north of Wills Tower, on the corner of Wills and A'Beckett Streets, is the Gill Building, constructed in 1888 and used as a cigar and tobacco factory until the great depression after which the building was occupied as a home for men by the Salvation Army until being redeveloped for apartments approximately 10 years ago.
4. Also to the east across Wills Street, south of Wills Tower, is the Empire Apartment building, a former office building converted into apartments in 1998.
5. To the south across Singers Lane is Customs House, an 18-storey office building with a frontages to LaTrobe Street, Wills Street and to Singers Lane.
6. To the west across Singers Lane is a 35 level apartment building currently under construction at 350 William Street. To the north of 350 William Street a permit has been granted for a 12 storey apartment building at 360 William Street. A 5.5 metres laneway is to extend from William Street to Singers Lane between 350 and 360 William Street.

1. The proposal is to redevelop the land at 17 to 23 Wills Street with a 35 storey mixed-use tower rising from within the retained exterior of the existing Moderne building on the land. The redevelopment is to comprise:
   • A 115 metre high tower and a built form that extends to the eastern and southern boundaries. Variable setbacks from the northern and western property boundaries are proposed;
   • 216 dwellings (150 dwellings with one-bedroom and study and 66 two-bedroom dwellings);
   • 54 hotel rooms (43 with an ensuite and 11 with an ensuite and kitchenette);
   • The hotel reception, 3 commercial tenancies and the entry foyer to the apartments at ground level;
   • Underground bicycle facilities (and services area) associated with the residential component of the proposal;
   • A two storey high glazed void at level 2, which will accommodate a restaurant accessed through the hotel lobby;
   • A gymnasium and half-court basketball facility, comprising a 'skypark' at level 32 with a void to the roof at level 35.
2. On 2 December 2011, the responsible authority issued a Notice of Refusal to Grant a Permit. The responsible authority submits that the Tribunal should affirm its decision to refuse to issue a permit, accordingly.

1. Having considered the submissions and evidence and inspected the subject land and its locality we are of the opinion that the determinative issues in this application are:
   1. The northern Interface
   2. Heritage and Urban Design
   3. Building Height

We deal with these issues below before making some observations on less determinative considerations.

1. To the north of the subject land is Wills Court, a 25 storey residential building. This building is built to the northern boundary of the subject land. Midway along the south facade of the Wills Court building is a 2.6 metre x 5.4 metres[3] light court. 48 small one bedroom apartments face on to this light court, two per level.
2. From level 1 to level 20 the window facing onto this light court is the sole source of natural light and ventilation for these apartments. The equivalent apartments in the upper five levels of the building have the benefit of a large south facing window built into the south boundary wall of the building.
3. The fact that these apartments were approved solely reliant on this inadequate lightwell for light and ventilation is a serious failure of the planning system. It is apparent that when the Wills Court building was approved it was anticipated that a building of similar scale could possibly be constructed on the subject land. The decision to approve these dwellings completely disregarded this possibility. However, the fact that these apartments exist is the relevant consideration. While the residents of these apartments cannot reasonably expect that no building will be constructed on the subject land, in our view their already compromised access to light and ventilation should not be further compromised.
4. The Municipal Strategic Statement (MSS), at Clause 21.04, recognises that residential amenity in the Capital City Zone is not comparable to that of residential zones. It states, however, that high standards of residential amenity with respect to residential building design and construction, which address issues such as access to sunlight, overlooking, open space and noise, need to be provided to all areas of the City[4]. Further to this, Clause 21.05 provides the following amenity principle for the central city area:

Ensure new buildings are well spaced and offset to equitably distribute access to outlook and sunlight between towers and minimise direct overlooking between habitable rooms.

1. The Guidelines for Higher Density Residential Development[5] are relevant to our consideration of the proposal's impacts on the adjacent dwellings. In addressing the relationship between buildings, the Guidelines acknowledge the challenge of providing appropriate separation between buildings to maximise light, air and outlook, while meeting strategic planning goals and respecting neighbourhood character. An objective is to ensure that areas can develop with equitable access to outlook and sunlight. Related design suggestions include providing spacing between taller buildings to provide outlook, daylight access and privacy for residents. According to the Guidelines, development proposals should demonstrate:
   • design initiatives to optimise daylight access to interiors of new and existing buildings.
   • site design and building massing to respond to neighbouring properties and their windows (considering outlook, privacy and daylight).
2. Specific, and quite prescriptive, guidance is provided at Clause 22.01 - being policy that addresses urban design in the Capital City Zone. Its design standards include:

Towers should be well spaced to equitably distribute access to an outlook and sunlight between towers and ensure adequate sun penetration at street level as follows:

• Development above 45 metres be set back 24 metres from any surrounding podium-tower development;
• Tower separation setbacks may be reduced where it can be demonstrated that towers are offset and habitable rooms do not directly face one another and where consideration is given to the development of adjoining lots.

1. The context and dimensions of the review site do not allow for the practical application of the design standard which stipulates a 24 metre separation between the proposed development and the Wills Court tower. In fairness, the Council acknowledged that compliance with this standard would not be a reasonable expectation in this case. Matters of daylight and outlook, however, still need to be addressed.
2. Given the siting and design of the adjoining Wills Court building, the applicant is faced with the very real challenge of achieving a built form outcome that allows for the reasonable development of the review site while at the same time providing an acceptable level of amenity for the neighbouring dwellings that are dependent on the lightwell. In view of the significant constraint presented by the adjoining building, we consider that achieving the high amenity aspirations of the MSS is difficult in the circumstances of this application. Nonetheless, relevant policies and guidelines referred to in the Planning Scheme make it clear the proposal needs to respond in a meaningful way to the dwellings within Wills Court.
3. In the amended plans the applicant has sought to preserve the development potential of its own land while responding to the problematic northern interface. With the advice of its consultants it has proposed a solution which seeks to preserve some sense of outlook from these small apartments and to ensure adequate daylighting (Refer figure 2 below). We think the applicant is adopting the correct approach, but ultimately we do not think that we can be satisfied that the proposed measures are sufficient to preserve a reasonable standard amenity of these apartments.
4. In relation to the outlook afforded by the proposed setbacks to these apartments, we are concerned that the protrusion of the lift and stairway core to within 3 metres of the boundary may provide an excessive sense of enclosure in relatively close proximity to the adjoining windows and balconies. The overall setback of the building provides the affected apartments with only a very narrow view of either the east side of Wills Street or the west side of Singers Lane. However, having regard to what could be a reasonable expectation in this central city context, we are not sure that an overall setback of the building greater than 3 metres is warranted. It may be that some further changes to the geometry of this setback could improve this narrow outlook.

1. In relation to daylighting, we consider Mr Richardson's evidence, and his approach to the assessment of the issue, to be very helpful. Mr Richardson used software which estimates the daylighting level, measured in Lux, at various levels within the lightwell using a standardised daylighting level for Melbourne[6]. Mr Richardson uses this approach to calculate daylighting in the lightwell before and after the proposed development. In our view, because of the already compromised amenity of these apartments, daylighting as measured by Mr Richardson's approach, at the lower levels of the Wills Court building, should not in any significant way be less than the existing condition.
2. It was Mr Richardson's evidence that under the proposed conditions daylighting at the lower levels of the building would be similar to existing conditions provided that the northern face of the proposed building was painted white to achieve a reflectance in the order of 0.90.
3. Our conclusion that the applicant's proposed measures are insufficient is largely based on this evidence. We consider that the daylighting outcome at the lower levels of the building is only marginally satisfactory and agree that this outcome is not robust because of its dependence on maintaining a high level of reflectance over the life of these two buildings[7].
4. We consider that for an informed decision, a number of different scenarios using different setback arrangements and material combinations should be tested using the approach adopted by Mr Richardson. On the basis of the material presented to us we cannot be satisfied that an adequate outcome has been achieved.

1. The subject land is occupied by a two storey, Moderne, factory building within its own heritage overlay. The building is a D grade building in a level 3 streetscape. The exterior facade of the building is to be kept on all three street frontages. Subject to concessions made during the course of the hearing, we do not think that the proposed alterations to the facade of the building are controversial from heritage perspective[8], although we make some observations on this issue later in these reasons. The significant heritage issue is the relationship of the proposed tower to those elements of the heritage building to be retained.
2. The approach proposed by the applicant is to create a moderately deep inset immediately above the retained heritage elements, to create the appearance of a gap between the heritage building and the tower above. The tower above this glazed void is proposed to be built to the east and south frontages of the land and set back from the western frontage. The heritage and urban design witnesses support, as a matter of general principle, the design approach of creating a glazed void between the heritage building and the tower above. It is the setback to this overhanging tower which is the source of disagreement between the applicant and the other parties.
3. The various heritage witnesses advocated setbacks as follows:
   1. Mr Beeston preferred a 3 metres setback to the east and south frontages based in part on the setbacks adopted at Wills Court for that part of the 25 storey building set behind the facade of the former Telephone Exchange. Mr Beeston accepted that balconies could intrude into these setbacks provided that they were lightweight intrusions similar to those which exist at Wills Court.
   2. Mr Trethowan similarly used Wills Court as his model and advocated a 3 metres setback to the Wills Street frontage, a 2 metres setback to the southern frontage and a 4 metres setback to the western frontage. Mr Trethowan would also accept the intrusion of balconies into his proposed setbacks, but only to the east and west.
   3. Mr Raworth was of the opinion that the glazed void proposed between the heritage elements retained and the tower above created a sufficient distinction between the old and new elements and that additional setbacks to the tower element were not required based on heritage considerations.
4. Mr McGauran advocated some increased setbacks to the tower element. His recommendations in this regard are based on urban design considerations rather than heritage considerations.
5. In relation to the Wills Street frontage Mr McGauran proposed a setback similar to the Wills Court building as it abuts the subject land, that is a setback of approximately 1.2 metres[9]. In relation to be southern frontage Mr McGauran advocated that habitable room windows of the south facing apartments should be set back further to achieve approximately 9 metres setback from windows in the building to the south of Singers Lane. Mr McGauran considered that the proposed setbacks to the west provided an adequate degree of separation across Singers Lane.
6. In relation to heritage considerations, having regard to the approach to heritage buildings adopted in the Wills Street precinct generally, and the grading of the subject building, we agree with Mr Raworth's assessment that the proposed glazed void or space between the heritage elements retained and the tower above, if properly executed, is an adequate solution from a heritage perspective.
7. However, from an urban design perspective we agree with the setbacks advocated by Mr McGauran except that, having regard to the fact that we think that larger setbacks will be required to provide an adequate light court on the northern interface,[10] we think that the setbacks proposed for the southern facade are acceptable in the circumstances surrounding the development of this land.
8. In relation to modifications to the facade of the heritage building, we make the following observations:
   1. the proposed fire services cabinet should be designed so that it does not intrude above what was the band of un-rendered brickwork below the ground floor windows;
   2. while it is perhaps desirable to reduce the number of new openings into the building on the southern facade, the activation of this laneway is also desirable and some changes in this facade which create a sense that the interior of the building opens out onto the laneway would also be appropriate;
   3. in the current design, the floors to be created behind the facade of the building to be retained generally follow the pattern of horizontal divisions within the existing building. This is desirable from a heritage perspective and facilitates the creation of a rooftop terrace and a glazed void or space between the retained heritage elements and the tower above. With this arrangement it is difficult to support council's preference for a clear height within the loading bay sufficient to accommodate its preferred garbage trucks, when such a change would significantly compromise the usability of the interior of the building as proposed and the horizontal lines of the heritage facade to be retained;
   4. in general terms the changes proposed in the western facade of the building by the applicant are acceptable, given this elevation is not as visible from the public realm as the other two, and therefore has a lesser importance or significance from a heritage perspective.

1. The MSS divides the municipality into twelve Local Areas. These are shown at Figure 2 at Clause 21.01. For each of these Areas, a specific vision and a series of implementation strategies are provided. The review site is within Local Area 1 - Central City. According to Figure 12 at Clause 21.08, the site is included within a 'sub-area' 3, a strategy for which is to ensure that the area provides a lower scale than the Hoddle grid and provides a contrast in scale between the lower scale of Carlton and North Melbourne and the higher scale of the Hoddle grid. It is also noteworthy that Figure 10 at Clause 21.05 identifies the Capital City Zone as a part of the municipality where substantial built form change is envisaged.
2. The amending plans propose a building with an overall height above Wills Street of 35 storeys. This is 10 storeys higher than Wills Court to the north. The relationship of the proposed building to the surrounding taller buildings is described in figure 1.
3. While heritage witnesses did, in some cases, express a preference for a shorter building, it was clear that this was not a major heritage consideration. This is understandable. The difference in scale between the heritage elements to be retained and the tower to be constructed above is such that it would seem immaterial from a heritage perspective if the overall height was 25 storeys rather than 35 storeys.
4. Mr McGauran considered that the building should be no more than 25 storeys high. That is, it should be similar in height to the adjoining Wills Court building. Mr McGauran's arguments are based on urban design considerations. He acknowledged buildings up to 35 storeys exist within the immediate environs of the land. In his view, taller buildings predominantly had frontages to the main city streets, and considered that in off main street environments, such as Wills Street, the scale of buildings should be less than that found on the main streets.
5. Council also argued that the extension of the proposed building above the height of the Wills Court building exacerbated the loss of amenity that would be suffered by the apartments adjoining the south facade of the Wills Court building.
6. Mr Biles considered that the height of the proposed building was acceptable in its context having regard to the range of building heights immediately proximate to the land. In this regard Mr Biles helpfully provided a simple 3-D modelling of the proposed building together with adjoining taller buildings, existing and proposed.
7. We consider that:
   1. it is not unusual for apartments in the central city to be constructed close to and have an outlook to buildings which are significantly taller. The important amenity consideration is whether or not the height of the building is relevant to other amenity considerations such as daylighting;
   2. whether or not the building is 35 storeys high, or 25 storeys high, is unlikely to significantly affect a user's perception of amenity of the rather pleasant urban space that is Wills Street;
   3. having regard to the mix of taller buildings proximate to the subject land, a 35 storey building is potentially an acceptable urban design outcome for the land from a broader cityscape perspective. We recognise that the policies seek to achieve a transitional height between the Hoddle grid and the lower rise areas to the north. However, we consider that the many examples of quite tall buildings that have been approved and constructed outside of the Hoddle grid in recent times (including developments at 350 William Street and on sites proximate to the corner of Victoria and Swanston/Elizabeth Streets) provide some support for allowing a building of the height proposed here.

1. Our observations in respect of a number of other considerations raised during the course of the hearing are set out below:
   1. In relation to the issue of wind effects, on the basis of Prof Melbourne's evidence, it is likely that the wind impacts arising from the proposed development are reasonable in this urban context. However, as we are not going to grant a permit for the proposed building, it would be appropriate to reassess the wind effects of a new design taking advantage of the emerging certainty as to the nature of surrounding development, particularly the 12 storey building proposed at 360 William Street.
   2. The plans and elevations of the proposal are highly schematic and provide a scant basis for an assessment of the architectural treatment of the exterior facade of the building. Mr Biles 3-D modelling of the building among its neighbouring taller buildings suggest that the modelling of the tower form as proposed in the design could potentially lead to an attractive outcome. However, in our view, the plans provide insufficient detail in respect of the finishing of the facade, and the materials to be used, to provide sufficient confidence in respect of the quality of the architecture in this important urban environment. Having made this observation, we accept that the land in Wills Street is not a St Kilda Road site with a view over the Domain and that economic reality will influence the architectural outcome.
   3. Mr McGauran in his evidence pointed to a large number of deficiencies in the detailed resolution of the interior design of the building. Deficiencies, or unresolved uncertainties in, the layout of the building include, bicycle parking for the proposed hotel, the adequacy of the "back of house" facilities for the hotel, the adequacy of the waste storage facility and access to the facility from important uses within the building such as the restaurant, the adequacy of the loading bay and access to the loading bay for the residents of apartments and the adequacy of hallway widths. We would have expected a higher degree of design resolution in respect of these interior considerations, just as we would for the architecture of the facade.

1. It follows from the above reasons that the decision of the responsible authority should be affirmed and that no permit should be granted, primarily because we do not think that we can be satisfied that measures employed in the amending plans to reasonably preserve the amenity of affected apartments in the building to the north are sufficient. We are also concerned that the amending plans do not represent a sufficiently resolved architectural solution for the development of the land.

[1] This Moderne building is a D-graded building subject to Heritage Overlay (H0850)

[2] The Telephone Exchange is a B-graded building subject to Heritage Overlay (H0759).

[3] Measured between balcony faces, approximately 7.8 metres overall.

[5] Department of Sustainability and Environment (2004), referred to at Clause 15.01.

[6] It is true that this approach does not seek to estimate daylighting within each of the apartments, but, the light available to the exterior of each apartments window provides a good basis for understanding the likely interior impacts.

[7] Mr Richardson proposed a painted surface. We question the maintainability of such a surface on such a tall facade. It may be the case that there are more easily maintained, highly reflective, finishes available. We do not think that the normal concerns about highly reflective high-rise buildings are relevant to this circumstance, particularly below level 21 of the Wills Court building

[8] We agree with Mr Raworth's evidence in this regard.

[9] The setback to the Wills Court building measures 1.2 Metres on the plans, this would need to be confirmed onsite. For the building as designed, with balconies enclosed by a solid exterior facade Mr McGauran advocated a setback of 1.2 metres to the face of balconies. Mr McGauran considered that balconies could intrude into the 1.2 metres setback if lightweight balconies similar to those at Wills Court were utilised.

[10] At least in respect of the lift and stairway core of the building.