Mr Chris Wren of Counsel by direct brief. Mr Wren called the following expert witnesses:

* Mr David Barnes, Town Planning Consultant of Hansen Partnership

Mr John Rantino, Solicitor of Maddocks Lawyers, and Mr Doyle after 5.00 pm on 29 April 2004

Ms Liz McArthur appeared on her own behalf and on behalf of Ms Margot Dickie, Mr Compton Harry and Ms Janet Beal.

Mr John Robertson, Architect, represented Diane and Andrew Smith

Mr Clive Jackson, Statutory Planner, for the Director of Housing.

1 This was an application under section 77 of the Planning and Environment Act 1987 to review a decision by the City of Port Phillip to refuse a permit (in Application No. 966/2003) for the land at 193 Rouse Street, Port Melbourne to be used/developed for the purpose of:

ii construction of a five storey building and works;

iii use of part of the ground floor for the purpose of shop/office;

iv a waiver/reduction of the requirements for car-parking for the ground floor shop/office; and

v a reduction of the loading requirements for the ground floor shop/office.

2 At the commencement of the hearing and pursuant to s 60 of the Victorian Civil and Administrative Tribunal Act 1998 (`VCAT Act'), Mr John Robertson, Architect, and Mr Clive Jackson requested leave from the Tribunal for their respective clients, Diane and Andrew Smith and the Director of Housing, to be added as a party to the review.

3 The request was acceded to, as there was no objection.

4 On the first day, the permit Applicant's counsel agreed to delete the reference to shop on the ground floor and limit same to office, generating a lesser number of parking spaces.

5 Mr Wren also said he would not contest tying the use of the ground level office to one of the apartments, if it need be so. As I agree there is such a need, were a permit to issue, I took this into account, and implemented same.

6 The Tribunal finds the following description of the site and locality, taken from Mr David Barnes' written submission, to be an appropriate one:

15. The subject site is located at 193 Rouse Street, Port Melbourne on the south-west side of Rouse Street, between Bay Street and Nott Street.

16. The site has a frontage of 8.53 metres to Rouse Street and a similar dimensioned abuttal to a lane at the rear. It has a depth of 24.99 metres and a total area of 213 square metres.

17. At present the site is occupied by a single storey, double fronted Victorian dwelling that is used as an office. The building has been significantly altered from its original form both internally and externally. It is identified in Council's Heritage Review as a contributory building.

18. The existing building is effectively built boundary to boundary with a three metre front setback, although the front verandah protrudes into this setback. Car parking is available in the rear yard under a carport.

19. Car access to the site is available from a lane at the rear that has access to Nott Street.

20. Abutting to the north-west (No. 195) - is a two storey industrial building that has 100% site coverage. The building has a height of around 8m, which approximates a contemporary three storey building. This building been (sic) identified as "contributory heritage place" in Council's Heritage Review (apparently incorrectly).

21. Beyond this building to the north-west along Rouse Street are a number of industrial/commercial buildings of varying height.

22. Abutting to the south-east (No. 189) - is a double fronted dwelling of a similar style to that on the subject site. It has previously been used as an office but ... is used as a dwelling at present. That building is constructed "almost" on the common boundary with the review site for the entire length of review site. This building has been identified as a non-contributory building in Council's Heritage Review, although Council officers suggest that it should have been identified as a "contributory heritage place".

23. Beyond No. 189 Rouse Street are three double storey Victorian terrace houses. These dwellings are identified as "significant heritage places" in Council's Heritage Review. A single storey dwelling and the double storey Molly Blooms Hotel on the corner with Bay Street, exist further in that direction.

24. To the north-east across the opposite side of Rouse Street - The entire street block from Bay Street to Nott Street, is presently being redeveloped for a major mixed use development. [see later discussion].

25. To the south-west of the site across the rear laneway - The rear of a two storey dwelling that is part of an integrated multi-unit development that fronts Mitchell Crescent. The rear yard of the dwelling directly opposite the subject contains a shed and is significantly overgrown, with shrubs growing along the fence line that abuts the lane.

4.3 The Changing Character of the Wider Surrounds

26. No. 193 Rouse Street is located close to Hobsons Bay (400m to the south-west) and the popular Bay Street Shopping Centre 700m to the north-east.

27. It is located in a part of Port Melbourne that is undergoing substantial change. Redevelopment trends in the area are resulting in a substantial increase:

i. in the intensity of land use, particularly residential apartments,

iii. in the introduction of contemporary architectural themes.

28. The site is about 1 km from the Tasmanian Ferry Terminal and associated Station Pier precinct. To the south-east of and within 500m are the Bayview Apartments, Station Pier Condominium, Sandridge Bay Towers, HMAS Apartments.

29. The Port Melbourne tram stop (Route 109) is about 1km from the subject site to its north-west. The subject site is within 200m of the 253 bus route in Beach Street and Bay Street and within 500m of the 250-1 bus route along Graham Street.

30. A major redevelopment is occurring on the opposite side of Rouse Street to the review site. It extends the entire length of the block from Bay Street to Nott Street. From information provided to me by Council its Rouse Street abuttal will involve:

* Two upper level towers setback behind the podium. One will be 6 storeys and the other will be 9 storeys.

* At ground level the building will be built to the boundary and include a row of shops.

31. This development will substantially alter the existing character of this part of Rouse Street.

7 The Tribunal extracts the following description of the proposal, taken from Mr David Barnes' written submission:

32. The proposal provides for the demolition of the existing building on the site and its subsequent redevelopment with a five storey building.

33. The site is proposed to be utilised as follows:

* A ground floor commercial use (either an office or shop) of 50m2 facing Rouse Street.

* An individual 3 bedroom apartment on each of levels two and three.

* A third apartment occupying levels four and five. The three bedrooms of that apartment will be supplemented by a study located on level 4, with the living areas located on level 5.

* A main entrance and lobby area with access from Rouse Street and also from the car parking at the rear of the ground floor level.

* Six under cover car parking spaces in the form of three tandem sets, accessed from the rear access lane, being Farrier Edward Lane.

* A lift with the plant accommodated in a lift pit room underneath the building.

34. The proposed development is envisaged to utilise the entire site.

35. The building is designed to have two key elements. The lower element is designed as a three storey section the (sic) responds to the height of existing significant heritage buildings in the street. [In the opinion of David Barnes] the upper two levels are designed as recessive elements that present as a lighter built form on top of the lower levels.

36. The building form is highly articulated and comprises a wide variety of different materials and finishes.

8 The subject land is zoned Mixed Use under the Port Phillip Planning Scheme. Within the Mixed Use Zone a permit is required pursuant to cl 32.04-5 to construct two or more dwellings on a lot, and for office or shop use.

9 As the proposal is greater than four storeys, it does not need to meet the Clause 55 ResCode requirements.

10 Car parking generation depends on the use nominated, and a waiver is required pursuant to cl. 52.06-1 unless the required number is provided of two per dwelling and 3.5 spaces per 100 m2 of net office floor area.

11 As there are three dwellings, six tandem car spaces are acceptable, leaving none for the office if it operates independently of the dwellings.

12 The land is also covered by Heritage Overlay No 1(HO1). Pursuant to Clause 43.01-1 a permit is required to demolish a building on land within a Heritage Overlay.

13 Where the demolition of a contributory building is concerned, Council's policy at cl 22.04-4 is to:

Not support the demolition of a contributory building unless and only to the extent that:

* the building is structurally unsound or cannot be feasibly reused, and either

* the replacement building and/or works displays design excellence which clearly and positively supports to the ongoing heritage significance of the area, or

* in exceptional circumstances the streetscape is not considered intact or consistent in heritage terms.

14 As for new development within Council's HO1, relevant council policy at cl 22.04-4 is to:

* Encourage new development to be respectful of the scale, form, siting and setbacks of nearby significant and contributory buildings.

* Encourage a contextual design approach for additions and/or alterations to a heritage place or for new development. A contextual approach is where the alterations, addition or new development incorporates an interpretive design approach (derived through comprehensive research and analysis). New development should sit comfortably and harmoniously integrate with the site and within the streetscape and not diminish, detract from or compete with the significance of the heritage place, or streetscape character of adjoining or nearby buildings.

15 The land is also covered by a Design and Development Overlay DDO1(2a).

16 Pursuant to cl 43.01-1 a permit is required to construct buildings and works on land within a Design and Development Overlay. The relevant purposes of the Design and Development Overlay, in addition to implementing the State and local planning policy framework, are to identify areas which are affected by specific requirements relating to the design and built form of new development.

17 The site lies within Schedule 1 to the DDO and more specifically within Area 2a of the Table to Schedule 1. Schedule 1 applies to the Port Melbourne Mixed Use Growth Area, a name which says a lot about the future direction for this area.

18 The relevant design objectives for Schedule 1 are:

* To encourage a built form that responds to the area's significant development opportunities at the same time as respecting those elements that make this area special and distinct from other parts of the municipality such as its seaside ambience, open sky views along Bay Street between Rouse and Beach Street and low rise built form at the street frontage.

* To achieve a built form that responds to the existing characteristics of Port Melbourne (which include the diversity of lot sizes, built form, design features and the complex grain of the urban fabric).

* To achieve an acceptable balance between the opportunity for increased built form, bulk and height and maintaining a reasonable level of residential amenity.

To protect the setting, appearance and significance of heritage places by:

* Ensuring that the height of new development on sites adjoining a heritage place provides a transition between the height of the heritage place and any higher surrounding buildings.

* Ensuring that frontage setbacks of new development complement the frontage setbacks of a heritage place on the same site or an adjoining site.

19 The more specific design objectives for Area 2a of the Table to Schedule 1 are divided into preferred and absolute. The preferred is to build to the street frontage up to 10.5 metres or three storeys and then, after setting back 5 metres, build up to a preferred maximum height of 19.5 metres or six storeys. The table reads:

Development is consistent with the traditional low rise, mixed character of the area's built form.

There is comparatively higher development that does not interrupt views of the CBD from Station Pier and the Bay or dominate the lower scale setting of the remainder of Rouse St.

The foreshore including associated bicycle and pedestrian paths, and to Bay Street and Rouse Street enjoys good solar access in mid winter.

20 The development complies with the above 'preferred' envelope, and only extends to five storeys, instead of a possible six.

21 Clause 2.0 of Schedule 1 considers that buildings which do not exceed the preferred maximum heights specified in the table do automatically meet the height design objectives. This says a lot about anticipated redevelopment of this part of Port Melbourne.

22 The first three levels also correspond, in terms of height, to the double storey proportion of the double storey Victorian terrace at 187 Rouse Street, with the upper two levels setback so they do not loom over the street.

23 As to setbacks, they accord with the preferred setbacks in the Table to the Schedule, although cl 2.0 continues:

Buildings and works are considered to meet the design objectives for setbacks if:

* Setbacks of any heritage place adjoining the land are matched. If the land adjoins more than one heritage place then the setback should be no greater than the largest setback and no less than the smaller setback.

24 As for Building Design Objectives, the first one effectively mandates a hard street front abuttal at ground floor level as follows:

Buildings and works are considered to meet the design objectives for building design if the following requirements, as appropriate, are met:

s provide direct access from the footpath with minimal change of level;

s incorporate provisions for visual `interaction' between ground floor activity and pedestrians, and

s avoid half-basement or ground floor car parks at a street frontage.

* In Beach, Rouse and Bay Streets between Graham and Rouse Streets, the floor to ceiling heights at ground are a maximum of 4.5m or capable of accommodating a future change of use to retail or entertainment, except for Beach Street between Johnston and Pickles Street.

* The design of lower levels (ground to third storey) integrates successfully with (and could interpret) traditional building forms in Port Melbourne by including:

s a predominantly masonry style with `punched' openings and articulated wall surfaces

* The design of buildings above three storeys is in a contrasting, `lighter' style of design, including:

s a stepping back of upper levels on frontages to all street frontages and lanes;

s heavier articulation in plan form and massing, and in front and side elevations to provide a varied skyline and avoid monolithic tower or slab-block forms, and......

* New development is not visible above the roofline of any building fronting Bay Street between Rouse and Beach Streets when viewed from a pointed located 1.5m above ground level at the centre of Bay Street and in line with the property frontages on the north side of Rouse Street. This affects the block bounded by Beach, Nott, Rouse, Graham and Dow Streets.

25 Through a range of interconnecting DDO's (1a, 1b, 1c, 1d, 2a, 2b, 3, 4, 5 & 6), the Council has gone into quite a detailed analysis of how the built form should develop, in a height envelope sense, in the immediate and surrounding vicinity_._

26 The broader aim is to maintain a podium or base level of three storeys in all parts of the Schedule 1 DDO, and transition height down towards the esplanade or up towards Bay Street so as to preserve bay views.

28 Council included mandatory environmental and streetscape improvement contribution conditions in the conditions circulated before the hearing commenced, although I have omitted the environmental condition, given past use of the site only for residential or office purposes.

i the extent to which the development complies with heritage and urban design policies (as well as other policies which encourage development to respond to and respect the prevailing heritage and neighbourhood character and amenity of an area) as against those policies which foreshadow more intense development and substantial change to the built form of the neighbourhood; and

ii whether the proposed development adequately responds to amenity considerations, such as through the impact of visual bulk, overshadowing, overlooking, and provision of car parking.

Setting the Scene - background and contextual information

30 Planning amendments were put into train a few years ago, which designated this area as one where substantial growth was to occur, in order to recognise the proximity to the central business district, to concentrate residential density and to revitalise under-used or vacated industrial land. To that end, the following are examples of redevelopments which have dramatically changed the nature of this vicinity of Port Melbourne:

i The former envelope factory bounded by Rouse, Bay, Dow and Little Bay streets into eight, nine and ten storey buildings;

ii The former St Joseph's school bounded by Rouse, Bay and Nott streets into four medium rise buildings of ten, eight and six storeys respectively;

iii The former Swallow and Ariel factory bounded by Rouse, Stokes, Princes and Beach roads into a eight storey building behind a heritage façade.

31 Although these are all larger sites than the subject one, the principle remains the same - that notwithstanding their location in or abutting a blanket or specific heritage place, all these sites were designated for substantial change.

32 In fact, the change that has come over Port Melbourne over the past few years and over the immediate vicinity of this site in the past two months has been nothing short of dramatic.

33 If I decide that heritage factors do not justify retention of the subject dwelling, the next question to decide is whether the replacement building is appropriate for this pocket of buildings on the south side of Rouse Street within which it sits.

34 As Mr Wren acknowledged, his client is putting the first toe in the water and his development should be considered in the context of the planning policy, and the likely redevelopment of properties around it.

35 It can comfortably be said that redevelopment of the two warehouse/factories to the west will also be to five or six stories, but it is the impact of the proposal on properties to the east that is the critical issue for me to consider.

36 To that end, it is acknowledged that next door at 189 will likely be demolished, but not the same can be said for the group of three intact Victorian terrace houses at nos. 183 - 187 Rouse Street.

37 So the question needs to be further narrowed down to the impact of the proposal on the intact group of terraces.

38 The first issue I have to resolve is whether the proposed demolition falls within the above heritage policies. I point out that the report to council prepared by council's delegated planning officer alludes to the probability that at some point the subject dwelling will be demolished to make way for a mixed use/residential development. Mr Bryce Raworth, expert witness for the developer, also supported the same likelihood and its reasonableness.

39 One of the factors that contributes to permitting demolition, is the quality of the replacement development (design excellence). Mr George Yiontis went to great lengths to design an exciting modern building, and ensure the entire building is well articulated on all four facades or sides, using aluminium louvres, cast aluminium screens, split face corrugated concrete, recycled timber slatting, stainless steel and more. They are designed to pick up themes of Victorian lacework, the ships on the bay and timber piers.

40 The second factor contributing to permitting demolition, is the non-intact nature of this side of Rouse Street, between Bay and Nott streets, as well as the total demolition permitted of the formerly heritage listed St Joseph's school opposite, to make way for a six, eight and ten storey development.

41 The second issue I have to resolve is whether the replacement building will sit comfortably and harmoniously integrate with the site and within the streetscape and not diminish, detract from or compete with the significance of the heritage place, or streetscape character of adjoining or nearby buildings.

42 To that end, there is a difference between the immediately abutting dwelling at no. 189, which it is acknowledged was erroneously omitted from a contributory designation, and the intact group of three significant double storey Victorian terraces at 183-187, one away from the subject land.

43 Although the Smiths stressed that I need to consider 189 as remaining, it is necessary to acknowledge that this mirror image single storey double fronted Victorian dwelling was on the market with a view towards redevelopment, before the subject proposal appeared, and that its own demolition is reasonably anticipated. This was acknowledged by all the parties as a distinct possibility - as opposed to the unlikelihood of demolition being permitted for the intact group of three significant double storey Victorian terraces at 183-187.

44 Mr Yiontis has been at pains to interpret the Victorian lacework with modern interpretive dense metal screens to the balconies to units 1 & 2 facing Rouse Street. He explained how he used same to mediate between the warehouses and the terraces. The issue is whether it is sufficiently respectful of the heritage place or still too powerful a façade treatment. I think it is too powerful a juxtaposition, and needs to be further mediated to better respect the Victorian terraces.

45 The fact that it complies with the preferred height limits only goes some way towards fulfilling the objectives of this part of the policy matrix.

46 Undoubtedly, given the heights of surrounding development (up to ten storeys across Rouse Street) there will be some sites on this side of the block that could rise as high as six storeys without any impact whatsoever on heritage values. The question is, is this such a site? I think it is, from a Rouse Street streetscape perspective, provided the rather dense metal screening is set back to align with the Victorian terrace verandah lacework.

47 The five storeys are a reasonable transition between the effectively three storey Victorian dwellings and the potential future six storey warehouse envelope next door.

ii Rescode not applying to five storey developments, together with the

indicates a planning desire towards more limited amenity considerations than are the norm in the usual suburban context.

(i) setbacks from rear laneways above three storey bulk;

(ii) lighter weight construction above three storeys.

50 The rear yard of the Department of Housing's unit immediately opposite the development is itself overshadowed by its own vegetation massing over its fence to the ROW, and the ROW is already influenced by the three storey sheer wall of the abutting warehouse, built up to the ROW.

51 But I do find that the rear portion of the proposed building envelope is too overbearing as far as bulk and massing is concerned, and as the shadow diagrams indicate. I find that setbacks from the rear laneway need to be greater, and that the bulk needs to be lightened.

52 The rear anodised aluminium screens need to be removed altogether and replaced with translucent screening.

53 The deck to the fourth level need to be removed altogether and the bedroom 1 to Unit 3 set back 2 metres from its rear title boundary, to increase setbacks to the ROW.

54 As for the deck to the fifth level, it needs to be set back to align with newly set back bedroom 1 to Unit 3 below and also screened with translucent screening or other lighter weight screening to the satisfaction of the Responsible Authority.

55 This can be achieved with plan amendments under condition 1.

56 This is no longer an issue, as I have tied the use of the office to one of the dwellings.

57 This case does raise the usual tension between a planned new character for an area and respecting historic form that has made the area special.

58 When the drafters of DDO1 created higher building envelopes, by multi layered sub schedules, in order to revitalise, populate and intensify the area, they also planned up to six storeys on the south side of Rouse Street, notwithstanding the lower finer scale Victorian heritage dwellings which they knew existed there.

59 The municipal planners also altered the zoning to Mixed Use, which adds expectation of substantial change to built form and residential amenity than if this were a normal residential zone.

60 After so much effort has gone into planning scheme amendments, the principles of DDO1(2a) should be implemented if both possible and reasonable.

61 As I said in Treloar v Bayside CC, [2001] VCAT 250

It is a waste of human energy and skill for time to be expended on drafting, testing and adopting specific policies for a particular centre ... and for that effort to then be ignored ... later. How much ink, how many reams of paper and how much human effort must continue to be wasted if such exercises are rendered futile?

62 But that is not to say such implementation can go ahead regardless. The micro amenity impacts such as bulk, massing and overshadowing render it necessary to scale the proposal back in parts, particularly as the planning scheme itself seeks setbacks from rear laneways.

63 Accordingly the Tribunal will allow the application for review and direct that a permit issue subject to modifying conditions and plan amendments.