Monday, 04 September 2017
Finance and Governance
CCL211-17 Council ats Combined Projects (Hurstville) Pty Limited - 12-22 Woniora Road, Hurstville - Update on Legal Proceedings
(Report by General Counsel)....................................................................................... 2
Author: General Counsel
Directorate: Office of the General Manager
Matter Type: Finance and Governance
(a) That Council accept and endorse the written offer dated 30 August 2017 from Combined Projects (Hurstville) Pty Limited (Developer) to enter into a Voluntary Planning Agreement (Attachment 1) for 12-22 Woniora Avenue, Hurstville (Property) accompanying Development Application DA154/2016 which proposes construction of 2 additional storeys to Building D in the mixed use commercial residential development approved by development consent DA 191/15 (Existing Consent) at the Property which will deliver the following public benefits:
i. the Developer will provide a monetary contribution of $1,000,000 based on the additional 6 metres height and 1,271m 2 gross floor area for providing infrastructure and embellishment improvements in and around the vicinity of the Property in the Hurstville City Centre;
ii. the cash contribution and offer will be formalised within a binding Heads of Agreement that is to be signed prior to the determination of the Development Application; and
iii. the final VPA will contain provisions necessary to ensure compliance with the provisions of the Environmental Planning and Assessment Act 1979 (EPAA).
(b) That if the terms of the offer are accepted by Council, Council endorse the offer subject to a binding Heads of Agreement being entered into prior to the Developer and Council approaching the Land and Environment Court to ask for determination of the current Court proceedings 2017/64868 by way of a section 34 Agreement.
(c) The Council delegate authority to the General Manager to negotiate and enter into the Heads of Agreement referred to above.
(d) That Council delegate authority to the General Manager to negotiate the specific terms of the Voluntary Planning Agreement and to subsequently exhibit a draft of the Voluntary Planning Agreement in accordance with the relevant provisions of the EPAA.
(e) That Council delegate authority to the General Manager to:
i. Authorise any minor changes to the draft Voluntary Planning Agreement following public exhibition, provided that those changes do not diminish the value or nature of the public benefits to be delivered as identified in (a) above; and
ii. Subsequently enter into the Voluntary Planning Agreement on behalf of Council.
1. Pursuant to report no. CCL 198-17 this report provides an update on a “without prejudice” meeting held with the developer and the respective lawyers on 29 August 2017 to explore resolution of Court proceedings. The Development Application DA154/2016 seeks consent for an additional 2 storeys comprising 14 apartments to Building D in the mixed use commercial residential development approved by development consent DA191/15 on the Property.
2. The Property is considered unique and it is not proposed that Council concede generally on its planning controls throughout the local government area. However, it is likely that the Developer will be successful in the Court proceedings and Council will then receive a maximum of $175,000 in contributions. The current offer proposes an additional $825,000 which could be spent in and around the public domain near the Property thereby providing significant public benefit to the community.
3. This report recommends that Council accept the VPA offer and resolve the proceedings in Court by way of s34 agreement, subject to a binding Heads of Agreement to enter into a VPA on the agreed commercial terms being entered into beforehand.
1. The Development Application DA154/2016 seeks consent for an additional 2 storeys comprising 14 apartments to Building D in the mixed use commercial residential development approved by development consent DA191/15 on the Property.
2. The proposed 2 storeys will increase the number of storeys in Building D in the approved development in its northern corner from 16 to 18 storeys. The total number of apartments in the approved development is increased from 367 to 381.
3. The Developer has commenced proceedings in the Land and Environment Court against Council’s deemed refusal of the DA. The proceedings are listed for hearing on 16-18 October 2017, following a failure to resolve at conciliation.
4. The Development Application includes a request for an exception to development standards under clause 4.6 Kogarah Local Environmental Plan 2012 with respect to the height and FSR. The gazettal of the Kogarah City Plan on 26 May 2017 introduced a height control of 39 metres and a FSR of 4.5:1 on the Property. However, under the Existing Consent, the development already exceeds the height control by 15 metres and the FSR by 0.27:1. The DA proposes a height of 60.5 metres and FSR of 5:1.
5. In addition, the recent Land and Environment Court judgment of Michael Murr v Georges River Council  NSWLEC 1369 (18 July 2017) considered the savings provisions within the amended KLEP 2012 and it was ultimately held that a correct interpretation of the KLEP 2012 is that consent for development applications lodged before 26 May 2017 must be granted as if the amendments to the height and FSR controls had not been made.
6. Under the VPA that applies to the Existing Consent, the Developer is required to pay $12,500 per apartment. This agreement was reached with the former Kogarah City Council and amounts to $175,000 with respect to this DA. In addition, the following public benefits are being provided by the Developer:
· Transfer of a stratum lot containing 79 car parking spaces;
· Transfer of 200 sqm of commercial floor space for community uses; and
· Dedication of land for road widening purposes.
7. Council’s prospects of success in the Court proceedings are considered poor. The Murr decision referred to is likely to be followed by a Commissioner in this instance, meaning that it will be difficult for Council to argue for compliance with height and FSR controls that did not exist in the LEP at the time the DA was lodged.
8. In addition, because of the Existing Consent, the Court may well consider that the Council’s controls have already been abandoned on this Property. The Developer has submitted additional information regarding overshadowing which appears to resolve this contention. Accordingly, on a planning/merit assessment, the adverse impacts of the numerical breaches of the KLEP2012 are considered minimal to non-existent.
9. This Property is considered unique in the area having regard to its history and location. It is considered in all of the circumstances, particularly having regard to the benefits provided under the existing VPA and the proposed additional payment of $825,000 pursuant to a VPA contribution for public benefit in the immediate locality, the Council should accept the VPA offer and resolve the Court proceedings by way of a section 34 Agreement granting development consent, provided that a satisfactory binding Heads of Agreement reflecting the general commercial terms of the VPA offer is signed.
10. The letter of offer and public benefits are considered to be satisfactory under the Council’s Planning Agreements Policy.
11. Therefore it is recommended that Council accept and endorse the offer to enter into a VPA dated 30 August 2017, subject to a Heads of Agreement being entered into prior to the determination of the Development Application. It is necessary that the binding Heads of Agreement be entered into before the Development Application is determined so that a condition of development consent can be imposed requiring the VPA to be entered into.
12. The Heads of Agreement and final VPA will provide that the Developer is to meet all Council’s costs in preparing, negotiating and executing the VPA as well as monitoring, enforcing and administering. The VPA will be registered on the Title to the land to bind any future successors in title. The payment of the contribution will also be a caveatable interest in favour of Council to ensure the payment is secured.
13. Subject to the above, this report recommends that the Council delegate authority to the General Manager to negotiate and enter into the Heads of Agreement, to then negotiate the specific terms of the VPA, and to subsequently exhibit a draft of the VPA. Following this, it is recommended that the General Manager be delegated authority to enter into the VPA on behalf of Council, with authority to make any minor changes to the draft VPA following public exhibition that do not diminish the value or nature of the public benefits.
14. Within budget allocation.
Letter of Offer