NSW court ruling could delay $8b worth of development, gov’t to amend planning act

The NSW Court of Appeal has ruled the NSW government’s approval of the Walsh Bay Arts Precinct redevelopment “invalid.”

The concept plan for the more than $200 million redevelopment of Walsh Bay Arts Precinct was approved by a delegate for the then-minister for planning, Rob Stokes, in May 2015. Bates Smart and Aspect Studios prepared an initial concept design, with Tonkin Zulaikha Greer appointed to coordinate design across the precinct in 2016. The precinct also includes Sydney Theatre Company’s The Wharf theatre, which will undergo a $60 million refresh designed by Hassell.

The owner of a neighbouring restaurant objected to the development application for the Walsh Bay Arts Precinct “primarily on the basis that no consideration had been given to the effects of the proposed construction phase on local businesses,” the Court of Appeal heard.

The owner challenged the approval in the Land and Environment Court of NSW (LEC), which was dismissed. The LEC found that “it was permissible to defer consideration of construction-related impacts because the application was a ‘staged development application.’”

Section 83B(1) of the Environment and Planning Assessment Act 1979 defines a staged development application as “a development application that sets out concept proposals for the development of a site, and for which detailed proposals for separate parts of the site are to be the subject of subsequent development applications. The application may set out detailed proposals for the first stage of development.”

However, in June 2017, the NSW Court of Appeal unanimously overturned the LEC’s decision, ruling the approval “invalid.” It found that the concept plan did not constitute a “staged development application.” The court scrutinized the language of the legislation and held that due to the use of the phrase “separate parts of the site,” a staged development application required two or more subsequent detailed proposals. The court also held that the assessment of stage development applications is required to consider construction-related impacts.

Law firm Mills Oakley characterized the Court of Appeal’s decision as a “bombshell” that “will have state-wide implications.” Another firm, Clayton Utz, called the decision “surprising.”

Following the decision, the NSW Department of Planning and Environment released a statement saying the decision “highlighted need for clearer definition of a ‘staged development application.’”

Marcus Ray, deputy secretary for planning services at the NSW Department of Planning and Environment, said, “The decision affects more than $8 billion worth of major local, regional and state significant development applications under assessment or recently approved.

“Our initial investigations estimate that delays because of this decision could have implications for the delivery of 14,500 homes across NSW – 9,000 in Metro Sydney and 5,500 in regional NSW.

“The Government proposes to amend the legislation so it is explicitly clear that staged development applications can include only a concept approval and a single subsequent detailed application. Construction impacts will be fully assessed before any work can start.”

The department has released a draft bill to amend the legislation for public consultation. It proposes to change “staged development applications” to “concept development applications” and clarify that “a staged development application may include a concept proposal and only one subsequent development application.”

It also proposes the introduction of a new provision to the act, Section 83B(5), which will state: “impacts of carrying out the development may be considered with concept proposals are being assessed but must be considered where approval to carry out works is sought.”

The department says the proposed changes reflect the accepted assessment practice.

“This two-stage approach has become common practice in the development industry. The Government is simply making the legislation clearer to ensure the current pipeline of DAs worth $8 billion can proceed without delay,” Ray said.

If the bill is passed by the NSW parliament, the changes will only to apply to applications that are pending. It will not apply to the Walsh Bay Arts Precinct redevelopment.

To view the draft bill, click here.

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