Evidence
31On behalf of the respondent council, evidence was given to the Court by a number of objectors, who either own apartments or are owner occupiers of apartments within the towers. Ms Susanne Cheng, town planner for Council gave expert evidence. For the applicant: Mr Paul Mitchell consultant town planner; Mr Todd Spagnolo and Mr Daniel Sprange both managers with the Oaks Group, gave evidence to the Court.
32The respondent tendered a volume of resident submissions and the Court also heard from a number of objectors who are either owner occupiers, or owners of commercial or residential units and also those that have been a tenant within the building.
33The Court heard that many considered they had purchased a unit in a building that contained no serviced apartments. One objector expressed concern that there are currently a number of serviced apartments being operated within the building and the concern that the impacts would increase in the future. These impacts included luggage and lifts, linen in the lifts, waiting times for lifts and security, and two break-ins were also identified where the police had been called on both occasions. Concern was also expressed about the noise from the lobby and holidaymakers. The lobby is a short distance from the mezzanine floor, where professional offices are located and as such, concern was expressed about being able to present a professional business. The example was given:
"It wouldn't look very nice if there are people with bags waiting downstairs in the Court here in the foyer trying to push past them as you come to work. I don't like seeing it. It's even worse when it impacts on when I have guests and visitors... to negotiate business and they have the same experience pushing past guests with noise, with bags and the like."
34Concern was also expressed that the Statement of Environmental Effects stated that guests are generally long-term guests for 3 weeks. However, the witness indicated that it is a lot less than 3 weeks.
"The normal stay is very short. Where I park my car, the space next to me is a serviced apartment space. There is a different car in there every day, every second day. There's been some damage to my car because people don't park carefully, obviously if you're a guest and not used to parking in tight spaces. My car's been dinged on two occasions. Also the website advertised one night accommodation. It's very easy to go to Google and try to book a room ... if you rang Oaks now by phone you'd get one night accommodation quite easily."
35Concern was also expressed about the fact that there are only two lifts that service 27 floors and rooms are serviced through the same lifts. Photographs in the bundle of linen in the lifts and in common areas were referred to. The Court was told that a large metal linen trolley, is observed in the lifts very often, "You'll notice it's also metal, so they're scraping on the edges of the lifts and on the walls as they go through, scratching lifts, causing damage wear and tear etc." The witness also confirmed that plastic coloured trolleys are also used, but this is for bulk towels that have arrived. Another photo showed a metal trolley in the mailroom, and the objector expressed concerns that one has to push past trolleys to check ones mail. By way of example, it was mentioned that:
"There are only two lifts servicing the offices, commercial offices and also the residential area. It's often slow, waiting at the bottom for a lift to arrive, because it's being used by so many people and then when it does arrive, I mean obviously there's trolleys, there's people with luggage so you can't get in, you have to wait for the next lift two only lifts, are bad enough. Just this morning I found a notice from Oaks basically saying the lifts will be out of work for 7 days due to maintenance. So we're now down to one lift for 30 floors for 7 days."
36Another owner of a unit, with a tenant, said that the costs of the levies have gone up dramatically in the last three or so years by over 50%. Another objector advised the Court that the impact of the short term residents will have through the large flow of people and the damage that will occur to all common areas, the gym area, the pool area and the like.
"The environment itself I don't believe will be the same as an environment with to longer term tenants, so with respect to that I believe it will be detrimental to my investment value, also my ability to be able to tenant it with tenants over a period of time due to the long-term damage, the way the building is perceived".
37A resident owner expressed concern to the Court about the difficulty accessing the car parking and said he had been blocked from the car park entry because people have nowhere to park to book into the hotel and the Sussex Street entrance is the only entrance to the serviced apartments and the car park of the building and there is no facility for dropping off and picking up hotel guests. He also expressed concern about being caught in the lift and the weight of the trolleys full of towels overloading the lift, photographs were tendered in the lift with the large trolleys. He said there were probably four different types of trolleys, depending upon if they are service trolleys or transporting the linen.
38Concern was also expressed about blocking access to the mailroom and the fact that the mailroom has been converted to a storage room and the conversion of the games area that is no longer in existence because of serviced apartments requirements. Concern was also expressed about deliveries associated with the serviced apartments to the Kent Street side, that one would then you need to go down in the lifts from the parking area and then up serviced elevators to the Sussex Street side, so that they can be transported further in the lifts for apartments in that tower. A resident owner expressed great concern about the safety of his son being put at risk by the activities associated with the serviced apartment.
39Another objector stated that the current levy has gone up 57% from November 2006 to June 2010. Concern was also expressed as a resident owner paying disproportionately higher cost in relationship to the serviced apartments, and an attachment was referred to in the bundle about air-conditioning, where 60% of the air-conditioning repaired in 2008 was for those that belonged to serviced apartments. The objector calculated this by looking at the mailboxes that were identified as, please forward to reception, as those that are used as serviced apartments. The lift maintenance reports were also referred to, that were contained in the bundle that showed the log sheet of incidents of lift maintenance reported. For example: "Passengers trapped, seven adults and two kids, many suitcases, tripped switch." The residents also reported incidents of where other cars had been parked in their car parking spaces.
40The Court met onsite the first morning of the hearing with the parties and inspected the subject building. The Court also had the benefit of statements of evidence from the planners and also a joint report and concurrent evidence.
41In their joint report, the planners agreed that the minimum stay of 7 nights would alleviate some potential impacts from short term users of the building. The experts also agreed that the behaviours of residential apartment owners, tenants and serviced apartment occupants are difficult to predict or determine with certainty and that there will be a proportion of anti social occupants within all three types of users.
42For contention 1 "inherent conflicts associated with the proposed scale and mix of residential and serviced apartments, in particular the co-location of apartments on the same building levels and using the same points of access..." Mr Mitchell anticipates that the serviced apartment occupants would typically reside in the building for about three weeks, whereas Ms Cheng from her research of the marketing, "it appears the stay is oriented towards shorter periods."
43Mr Mitchell considers that "the distinction in use between residential and serviced apartments is minor, to the extent of being immaterial", whereas Ms Cheng maintains there is a distinction between the expectations and behaviours of residents and serviced apartment users, because the latter group are impermanent tourists and visitors, compared to owners/residents. Ms Cheng also notes that the definition of tourist and visitor accommodation in the draft standard instrument is, "accommodation not being a dwelling house." Mr Mitchell points to the definition of tourist and visitor accommodation and residential accommodation, both including hostels and backpacker accommodation.
44Mr Mitchell considers that typically users are workers and longer term guests with accommodation costs met by employers and in such circumstances, guests would be working long hours and not inclined to noisy late-night activities. Ms Cheng disagrees that this description is typical. Ms Cheng is of the opinion that "whether they are owner occupied or long-term tenants, that renters have a greater interest in caring for the building, in order to have their rental bond returned and they have a greater sense of ownership, accountability and permanence, compared to visitors and guests." Mr Mitchell considers that serviced apartment guests would also have an interest in caring for the building, as credit card information is taken and that a proportion of renters and similarly serviced apartment guests, would have less interest in the care of the building.
45In terms of user conflicts and expectations, Mr Mitchell considers that "the behaviours, which underlie the impacts are dependent on the standard of accommodation, as opposed to the length and type of tenure." Ms Cheng on the other hand, considers "the permanence of residents and the impermanence of serviced apartment users is a critical difference that gives rise to different behavioural norms, while other factors such as the standard of accommodation and supervision are secondary." The planners agreed however, that potentially a higher proportion of short term occupants would be disrespectful of neighbours.
46Mr Mitchell, states that most visitors travel to and from interstate by air, resulting in the underutilisation of car parks. Ms Cheng is unable to confirm that a majority of the guests do not bring a vehicle with them, or hire a vehicle, for all or part of the stays, however, photos taken by residents clearly show windscreen notices with names of guests and durations of stays, indicating there is a demand for car spaces by serviced apartment guests.
47On the question of movement patterns in lifts and corridors and common areas of serviced apartment occupants and permanent residents, Mr Mitchell is of the opinion that they would be similar, whereas Ms Cheng considers serviced apartment use will give rise to more peak movement times during check-in/out periods, with surges when groups arrive. For example sports teams or tour groups arriving and generate a greater turnover of occupants per unit. She also considers there are additional movements of baggage, service and maintenance trolleys required for serviced apartment use in the building. Mr Mitchell considers that sports teams would be unlikely to stay in serviced apartments due to their price and a high proportion of one bedroom apartments.
48In summary, the planners agreed that there are inherent differences in behaviour, living and activity patterns, however they disagree over the extent of these differences and their impacts.
49During Ms Cheng's site inspection, she witnessed a congested reception desk in the lobby and wear and tear in hallways likely to be attributable to cleaning carts, and cars parked in incorrect spaces. Mr Mitchell disagrees that the wear and tear is likely to be attributable to cleaning carts, as these are plastic and less than a metre in width and he said that the wear and tear that was seen in the building could potentially be attributed to residential tenants moving furniture in and out. Ms Cheng considers that the daily trolley traffic is more likely to cause greater cumulative wear and tear to the building than removalists. Mr Mitchell considers that the additional cleaning services for serviced apartments would only provide a marginal increment of additional potential wear and tear, whereas Ms Cheng considers that the number and distribution of serviced apartments and the required daily travel paths for utilities and carts would be significant, over and above any such requirements associated with residential apartments.
50Ms Cheng considers the manner of distribution of serviced apartment car spaces, intermingled with residential car spaces throughout seven basement levels, is difficult to supervise and not appropriate, especially for serviced apartment guests who are not familiar with the car park layout.
51On the issue of the community games room, the planners agree that the condition of consent is not being complied with as it is currently being used as a mailroom and cleaners' store. Although it was noted that this was approved by the executive committee. Ms Cheng notes that the mailroom is also used for storing service trolleys for serviced apartments, which disrupts the ordinary use of this common property. She notes also the luggage store occupies an area of the main entry foyer that is not in accordance with the approved plans. In her opinion this is an example of conflicts in the use of space in the building arising from serviced apartment use.
52Incremental changes, Ms Cheng said have seen the mail room relocated from the ground floor at Sussex Street, to the current location and a luggage store located in open foyer space to the benefit of the serviced apartment use. Mr Mitchell understands the mailroom is not used for the storing of trolleys, and are stored in the cleaners' store.
53On the conflicts and impacts on long-term residents as detailed in their submissions, Mr Mitchell disagrees that the issues raised are directly attributable to serviced apartments and argues that these are common issues seen in residential buildings.
54Ms Cheng raises the issue of a lack of any check-in system to serviced apartment guests arriving at the site by car, or any formal parking lay by to facilitate the check-in process. Mr Mitchell states that there is legal parking outside the building at certain times and guests can only bring cars on site on a prearranged basis.
55On the issue of obstruction, inconvenience and delays from congestion of the lobby for permanent residents, Mr Mitchell is of the opinion that these would be for occasional short periods, whereas Ms Cheng does not agree this would be occasional. She notes that:
"The physical pinch point will persist, even if some furniture is removed, that is the couches, and that 40% of the units in the building are proposed to be serviced apartments. The operation of the business means that lift and lobby traffic will be a persistent and daily occurrence more acute during summer period, nevertheless an ongoing state of operation."
56Ms Cheng considers the main physical constraint is the lift service, and that the serviced apartment use will strain finite lift capacity, because there are peak check-in/out times and the number of passengers per trip would be reduced by serviced apartment users, who typically have baggage. The fact that there is no dedicated lift for serviced apartment users, means residents lift users would be adversely affected on a routine daily basis. Mr Mitchell does not agree that the movements of serviced apartment guests will constrain lift services.
57The council contends there is inadequate storage facilities for luggage, linen trolleys and maintenance carts and the common property has been assigned in part, for the baggage room. Mr Mitchell disagrees that the storage facilities are inadequate, and that the store room was approved by the executive committee for which The Oaks pay a fee. Ms Cheng is of the opinion that this takes away circulation space in the lobby and the DA documentation does not provide details for these facilities.
58Mr Mitchell considers that any incompatibility can be managed effectively. Ms Cheng is of the opinion that the proposal gives rise to an over reliance on management, which is subject to change and the critical planning issue of ensuring the mix of uses is physically compatible it is not addressed by the application. She further considers that given the proposed number and manner of distribution of serviced apartments throughout the buildings, the proposal would not provide reasonable levels of amenity for residential apartment residents.
59The planners agree that a plan of management would be beneficial however Mr Mitchell considers that this would be effective if it was largely self enforcing. Ms Cheng considers that the quality of implementation of a plan of management, including the effective resolution of any incidences, would vary depending on the managing agent, the quality of which cannot be assured.
60On the issue of reasonable levels of amenity, Mr Mitchell argues that as the DCP seeks to have similar levels of amenity for serviced and residential apartments, this should allow for a change to and from serviced apartments. Ms Cheng disagrees, as a strategy contained in the DCP states that serviced apartments should have a comparable level of amenity to residential buildings so that any subsequent conversion of serviced apartments to permanent residential stock is not constrained by poor amenity.
61The planners also disagree about the change of use and the amenity impacts. Mr Mitchell considers that the building was designed and approved to enable a change of use, without any diminution of overall amenity. Ms Cheng notes that the proposal leads to over 40% of total units being serviced apartments, which is a significant number and the manner of distribution on different levels is inappropriate, while 24 serviced apartments have previously been approved at the site, they were located in a discrete part of the Sussex Street building with their own lift.
62The experts do not agree as to the extent the proposal constitutes substantial redevelopment, and whether the provisions of SEPP 65 apply, or whether it is a change of use of the existing building. Mr Mitchell considers the proposal is not a substantial redevelopment, as few works are necessary for the conversion of the apartments to serviced apartments. Ms Cheng considers that the proposed change of use of 40% of the units within the complex is a substantial redevelopment, in terms of use, character and impacts.
63On the question of whether the residential apartments and serviced apartments represent a mixed use, Mr Mitchell is of the opinion that it is exclusively residential and not a mixed use, whereas Ms Cheng is of the view that both buildings are mixed use, by virtue of the difference between residential accommodation and serviced apartments and the different BCA requirements. Mr Mitchell accepts that the Kent Street building is already a mixed use building, in that it also has a commercial component. Mr Mitchell considers that as a solely residential development, separate access for different types of short and long term residents is not necessary. He notes that the commercial uses at levels 2 to 6 of the Kent Street building, are serviced by the same access and that there is only a separate entrance for the ground floor retail.
64On the contention that the proposal will result in an unacceptable level of user conflicts and diminished safety and amenity, Mr Mitchell disagrees that the proposal will unacceptably diminish amenity and does not believe evidence has been produced to support the reduced safety contention. Ms Cheng considers that the proposed change of use should be in accordance with the principles under SEPP 65, which is to plan by better design against security and safety risks posed by different user groups.
65Mr Mitchell argues that access to the car park is controlled, as the entrance is gated and lifts to the car parks are accessed only by key card. Ms Cheng considers that access to all seven basement levels is not able to be controlled, due to the intermingling of residential and serviced apartments car spaces and this co-location is inconsistent with accepted design principles and that for a relatively large development the lack of separation diminishes actual and perceived safety and security.
66The planners agreed that the coming and going of strangers can lead to security issues and that this is the case for all residential buildings.
67While it is agreed between the planners that cleaning and maintenance is required for the common areas irrespective of the presence of serviced apartments, Mr Mitchell considers that the additional requirements for cleaning of serviced apartments would not have unacceptable impacts, whereas Ms Cheng disagrees and states that they will require room maintenance and cleaning to a greater extent than residential apartments, in terms of frequency.
68On the length of stay of guests for serviced apartments, Mr Mitchell states that this is a market response and Ms Cheng considers that the satisfying of market demand, driven by tourists and visitors, is not a sound reason for the inappropriate provision of serviced apartments in the subject residential buildings, and this would have a detrimental impact on residential amenity. In her opinion, it is the manner of satisfying the demand that it is an important planning consideration.
69On the issue raised by the council that short term occupants who do not have a financial or stewardship interest in the building are more likely to generate increased wear and tear to the common property, Mr Mitchell argues that tenants of residential apartments would also contribute to wear and tear in common property areas. Ms Cheng considers that tenants would have more of a financial and stewardship interest than visitors as they would regard their unit as home, rather than a place to stay only and more is at stake in terms of rental bond and rental history, compared to serviced apartment guests.
70The issue of whether the proposal undermines certainty for owners and residents, Mr Mitchell does not consider this to be the case whereas Ms Cheng states that uncertainty is created for owners and investors of residential apartments, who have an expectation of the residential character and amenity of the site, and the intermingling of serviced apartments catering for visitors and tourists, would not be in line with such expectation.
71Ms Cheng considers that the proposal is contrary to cl 36(d) of the Sydney LEP, as serviced apartments are tourist and visitor accommodation, as distinct from residential accommodation or housing stock, and the proposal does not increase the size or diversity of housing stock. Mr Mitchell disagrees and believes the objective used is not the correct one, it should be to increase the size and diversity of housing stock. He does not accept that the proposal has residential amenity and compatibility issues and in his opinion it is not a mixed use development, and that residential safety and security is also not an issue.
72The planners agreed that assuming the works are identified for accessibility and building compliance, these matters can be addressed.
73Mr Mitchell told the Court that he thought "the definitions in the LEP are so fine as to be effectively meaningless". Ms Cheng said that she would look to the planning instruments at first instance to characterise exactly what kind of use and clearly the definition is that serviced apartments is a form of 'tourist and visitor accommodation' and if you look at this definition it states, "to provide temporary or short term accommodation for travellers and tourists who have their principal place of residence elsewhere". She also referred to the LEP where dwelling is defined as 'residential accommodation' and this is defined as "permanent or long-term accommodation." Mr Mitchell further commented that:
"The reasons the definitions in the LEP are unhelpful, is because they're clearly types of accommodation needs that are defined as residential accommodation that fall within the same functional category as serviced apartments, so residential accommodation includes residential flat buildings, dwellings, boarding houses, hostels and student accommodation...there is no doubt that students use serviced apartments and short-term occupancy that would otherwise occupy hostels or boarding houses...so I just find the distinction between the various categories in the LEP so fine as to be artificial. There is not a distinct type of residential accommodation that is so narrow as to fit the definition of serviced apartments in my opinion".
74Mr Mitchell stated that a typical user would stay for 3 weeks on a work assignment. On cross-examination, he was asked if he had referred to the booking sheets or booking records of the Oaks, and he had not. Mr Mitchell was cross-examined and asked, whether in terms of the statements about length of stay whether he thought it would have been beneficial to undertake an assessment of the historical records of the number of people who stay for 1 night, 2 nights, 7 nights, 3 weeks as a proportion of the use.
75Mr Mitchell responded, "It could have helped yes, provided it was representative of what would happen in the future in terms of the consent." Mr Mitchell said he had discussed the nature of the complaints generally with the building managers and ascertained that there was a complaints register, but had not looked at same. Before preparing his original report, he had not looked at the submissions received from objectors although he subsequently did.
76The question was put to Mr Mitchell that the 24 serviced apartments originally approved were serviced by the one lift, whereas the 143 serviced apartments proposed in this application, are throughout the two buildings. Mr Mitchell says that there would be a need for the provision of trolleys that provide towels and sheets to access all the serviced apartments and that would be the only difference in the movement of trolleys and that all common areas, irrespective of the existence of serviced apartments, require trolleys to visit them on a daily basis for cleaning and maintenance.
77On the question of a Plan of Management to assist in the day to day management of the serviced apartment use, Mr Mitchell said:
"There are aspects of management that need to be improved, but whether or not a Plan of Management is the most appropriate vehicle... because most of the concerns seem to be about the common property, not the interiors of the serviced apartments the subject of the DA, and the body that is responsible for management of the common property is the owners corporation".
78He considers therefore that it would be more appropriate to deal with it by way of an amendment to the by-laws and the contract held with Oaks, in terms of caretaking. Mr Mitchell said that:
"The appropriate entity is not the contractor, the contractor is accountable to the body that is legally responsible, that is the owners corporation, and it is more effective to give that group the full powers it needs, including better control over the contractor if that is necessary. Perhaps even including replacing the contractor, if that is necessary. There are a number of contracts with the Oaks who have a caretaker agreement with the owners corporation that deals, as it were, with the management of the building and common property, and then there is the contract of each individual unit owner, and it is in that capacity that Oaks has lodged this development application as agents, not in its capacity as caretaker".
79On the current management and the perceptions of residents Mr Mitchell commented that "better communication about the issues and who is responsible would be a starting point, and the procedures for management... but management so far, as a certain proportion of the residents are concerned, is clearly ineffective and so that needs to be improved".