VCAT refuses proposal for a residential tower in South Yarra

VCAT has overturned the decision of the Stonnington City Council and refused an application for a twenty-two storey mixed use development in South Yarra, which would have exceeded the preferred maximum building height for the subject site by 30m. The Tribunal’s decision in C&L International Holdings Pty Ltd v Stonnington CC [2019] VCAT 69 demonstrates that, while the development was proposed in an area characterised by intense development and existing taller buildings, this does not give a carte blanche for development in the area. Each proposal must be considered on its own merits, and a taller tower can be approved, but only when this meets the built form objectives of the zone and achieves an appropriate balance between the need to provide housing in Major Activity Centres against the protection of future character in the area.

Partner Meg Lee and Associate Zina Teoh discuss the key takeaways of the decision.

The Proposal

The development was proposed in the Forest Hill precinct in South Yarra on the western side of Chapel Street between Alexandra Avenue and Toorak Road, an area characterised by intense high rise development as well as the historic Melbourne High School building. The Activity Centre Zone – Schedule 1 (ACZ1) sets a 38m preferred maximum building height for the subject site, with specific built form objectives relating to preserving views of Melbourne High School from the west.

The proposed building was to exceed the preferred maximum building height at 68m, comprising a 20 storey tower including apartments, office and retail space and a maternal child and health centre.

Built form

Key to the Tribunal’s decision are the built form requirements under the ACZ1 for the subject site, which include guidelines designed at protecting views of the Melbourne High School building as follows:

• Ensure that new buildings do not confuse the Melbourne High School building roofline as viewed from Yarra Street, at a point directly perpendicular to the midpoint of the main hall.
• Avoid buildings having an overbearing presence on the Melbourne High School building.

The built form controls for the area are the result of years of strategic planning, which, in 2007, first recognised the importance of preserving the heritage view of Melbourne High School.[1] Since permanent controls protecting this view inserted into the Planning Scheme in 2009[2], a number of very tall developments have been built along Chapel Street which now form the backdrop to the School when viewed from the west, beginning with a 17 storey building north of subject site and increasing in height to the south with buildings reaching 22, 32 and 49 storeys.

The permit applicant argued that the view of Melbourne High School is now experienced within this setting of tall buildings, and that the proposed development represented an appropriate transition in height between the buildings from the north to the south and will not be overbearing. The Tribunal disagreed, noting that:

“just because there are existing buildings that are taller and not slender which impact and overbear the MHS building does not give carte blanche for a development such as the one proposed.”

The proposed development was found to be too tall, not slender and too close to the Melbourne High School building, resulting in a proposal with an overbearing impact on the School and failing to meet the built form objectives of the ACZ1. Accordingly, the application was refused with the Tribunal commenting that it was possible for an acceptable building to be achieved which would be visible behind the Melbourne High School, but a redesign was required.[3]

Heritage

Following from its conclusion that the built form had an overbearing impact on the Melbourne High School (MHS) building contrary to the ACZ1 objectives, the Tribunal also found that this was an unacceptable impact from a heritage perspective, concluding that:

“…the height, breadth and materiality of the proposal before us will have an overbearing presence on MHS which would have an impact on its aesthetic significance. The proposal will thus impact upon the cultural heritage significance of MHS and is an unacceptable planning outcome.

Significant community benefit

Although it was not critical to the decision, the Tribunal also considered the circumstances which a development can exceed 38m in the context of the ACZ1 control requiring a significant community benefit to be achieved when exceeding the preferred height. The ACZ1 provides that the preferred maximum building height can be exceeded in some circumstances if:

• It can be demonstrated that a significant community benefit can be achieved; and
• It continues to meet the objectives, requirements and guidelines in relation to visual impact and overshadowing with increased upper level setbacks.

The proposed development sought to provide a “significant community benefit” predominantly by providing the Council with ‘shell’ space in the development which was proposed to be fitted out and used by Council as a maternal child and health centre (MCHC).

The Tribunal considered whether the above two dot points are jurisdictional facts and preconditions which must be satisfied in order for a responsible authority to exercise its discretion to approve a building exceeding the preferred maximum building height.

The Tribunal found that there was a clear intent in the Planning Scheme that these preconditions be considered guidelines requiring discretion of a decision maker, rather than mandatory considerations, concluding that the responsible authority’s discretion is not constrained. Accordingly, it was relevant to consider these guidelines in determining the appropriateness of the height exceedance, but not essential that these preconditions be met. In coming to its decision it followed the reasoning in Bensons Property Group Pty Ltd v Stonnington CC [2017] VCAT 2155 which found, in relation to the ACZ1, that:

“I accept that even if the two limbs are met there may be circumstances where it is not appropriate to allow the exceedance of the preferred height.”[4]

Additionally, while it was argued by the objector parties that the degree of significant community benefit should be commensurate to the amount of private benefit obtained from the height exceedance, the Tribunal found that this analysis not supported by the Planning Scheme in this case. The Tribunal instead supported the permit applicant’s argument that the term “significant” is not to be equated with ‘substantial’ or ‘large’, but rather that the benefit is to be important or of consequence to the particular community.

The Tribunal agreed that the provision of the MCHC facility will provide a significant community benefit to the residents of Stonnington, however they did not agree with evidence put by the permit applicant that the provision of the space for any community activity would necessarily be appropriate and result in a significant community benefit.

Implications of the decision

The South Yarra end of Chapel Street, with its inclusion in the Prahran/South Yarra Major Activity Centre and its proximity to public transport, means that the area has experienced strong policy support for higher density to accommodate population growth. This is consistent with objectives in Plan Melbourne which encourage redevelopment of land near jobs, services and infrastructure to provide new housing needed to support Melbourne’s growing population.

The Tribunal’s decision in this case serves as a reminder that, even in an area where intense development is encouraged, built form and height must be guided by relevant built form objectives in the Scheme which serve to protect the character of the area, including by preserving the heritage values of places which contribute to Melbourne’s character, such as the historic Melbourne High School building.  Further, when considering the community benefit being offered, developers will need to consider the specific needs of the relevant Council area and ensure that the benefit being offered is adequately important to that particular area to be considered to meet the “significance” test.

Authored by:

Meg Lee, Partner

Zina Teoh, Associate

[1] See the Chapel Street North Guidelines for Forest Hill prepared by MGS Architects (December 2007)

[2] First introduced as permanent controls in 2009 via Amendment C58 and as interim controls by Amendment C55 in 2006.

[3] C&L International Holdings Pty Ltd v Stonnington CC [2019] VCAT 69 [46]

[4] Bensons Property Group Pty Ltd v Stonnington CC [2017] VCAT 2155 [24]