NILLUMBIK PLANNING SCHEME
AMENDMENT C22
PANEL REPORT
August 2003 REPORT OF INDEPENDENT PANEL
AMENDMENT C22 TO THE NILLUMBIK PLANNING SCHEME
Cathie McRobert (Chairperson)
Neale Laird (Member)
Stephen Sully (Member)
August 2003 Report of Panel Amendment C22 To The Nillumbik Planning Scheme August 2003
ACRONYMS
The following is a list of acronyms used in this report.
Departments, Organisations and Businesses
DOI Department of Infrastructure VCAT Victorian Civil and Administrative Appeals Tribunal ABS Australian Bureau of Statistics. JHD Jebb Holland Dimasi Pty. Ltd. SGS SGS Economics and Planning Pty. Ltd. EE Essential Economics Pty. Ltd.
Zones B1Z Business 1 Zone R1Z Residential 1 Zone
Overlays DDO Design and Development Overlay DPO Development Plan Overlay
Other Terms
DCRBA Diamond Creek Road Business Area LPPF Local Planning Policy Framework MSS Municipal Strategic Statement SPPF State Planning Policy Framework VPP Victorian Planning Provisions Report of Panel Amendment C22 To The Nillumbik Planning Scheme August 2003 CONTENTS
1 INTRODUCTION 1
1.1 Appointment of Panel and Advisory Committee 1
1.2 Hearings 1
2CONTEXT 5
2.1 The Amendment Area and Existing Development 5
2.2 The Locality 7
2.3 The Application 7
2.4 Planning Framework History 9
2.5 Existing Zones and Overlays 11
3 THE AMENDMENT 13
3.1 Scope of the Amendment 13
3.2 Amendment Exhibition and Submissions 13 3.2.1 Exhibition 13 3.2.2 Submissions 13
4 PLANNING POLICY 15
4.1 State Planning Policy Framework (SPPF) 15
4.2 Melbourne 2030 16 4.2.1 What aspects, if any, of Melbourne 2030 are relevant? 17 4.2.2 How do those aspects of Melbourne 2030 affect the amendment or proposal? 18
4.3 Local Planning Policy Framework (LPPF) 19
5 STRATEGIC PLANNING STUDIES 21
5.1 Local Structure Plan (LSP) for Plenty/Yarrambat 21
5.2 Diamond Township Creek Strategy 21
5.3 Nillumbik Activity Centres Review 22
6 THE FUTURE OF THE DCRBA - KEY ISSUES 25
6.1 Does the correction of a Zoning Error justify the Amendment? 25 Report of Panel Amendment C22 To The Nillumbik Planning Scheme August 2003
6.2 Should additional retail floorspace be directed to established activity centres? 26 6.2.1 Opportunities and Constraints in Diamond Creek 28 6.2.2 Opportunities and Constraints in Other Centres 30 6.2.2.1 Greensborough 30 6.2.2.2 Eltham 31 6.2.2.3 St. Helena 31 6.2.2.4 Apollo Parkways 31
6.3 Would development of the DCRBA for Intensive retailing detract from the retail role and function of established activity centres, particularly Diamond Creek? 32 6.3.1 Economic Assessment 32 6.3.2 Consideration of the Economic Evidence 32 6.3.3 Panel Directions on Economic Evidence 33 6.3.4 Expert Witness Conference 34 6.3.5 Economic Models 35 6.3.6 Economic Parameters 35 6.3.6.1 Population Forecasts 36 6.3.6.2 Retail Spending Forecasts 37 6.3.6.3 Turnover of Proposed Supermarket 39 6.3.6.4 Turnover Captured from Beyond the Trade Area 40 6.3.6.5 Turnover Captured from Escape Expenditure 41 6.3.6.6 Turnover of Existing Centres 41 6.3.6.7 Turnover of Existing Supermarkets 43 6.3.7 Economic Impact Assessment 45 6.3.7.1 Impact on Centres 45 6.3.7.2 Impact on Supermarkets 46 6.3.7.3 Relevance of Comparisons 47 6.3.7.4 Determination of 'Acceptable' Impact 49 6.3.7.5 Consideration of Impacts 50 6.3.7.6 Other Development Scenario's 52 6.3.8 Investment Sentiment 53 6.3.9 Floorspace Provision 55 6.3.10 Conclusions on Economic Evidence 56
6.4 Is the DCRBA An Existing or Planned Activity Centre? 57
6.5 Should the DCRBA develop As a Neighbourhood Activity Centre? 60 6.5.1 Is there A Need For A Neighbourhood Activity Centre At the DCRBA? 60 6.5.2 Is the DCRBA an Appropriate Location For a Neighbourhood Activity Centre? 62
6.6 Would there be a clear net community benefit if the DCRBA is developed as a neighbourhood activity centre? 64 Report of Panel Amendment C22 To The Nillumbik Planning Scheme August 2003
6.7 Is the proposed Residential 1 Zoning appropriate? 65 6.7.1 Strategic Justification for the R1Z 65 6.7.2 Is the R1Z the Most Appropriate Zone? 67 6.7.3 Should The Whole of the DCRBA be rezoned? 68 6.7.4 Structure Planning Issues 69
7 RESPONSE TO STRATEGIC ASSESSMENT GUIDELINES 72
7.1 Is an amendment required? 72
7.2 What is the strategic basis for the amendment? 72
7.3 Is the amendment consistent with requirements of the Planning & Environment Act 73
7.4 Does the amendment or proposal support or implement the SPPF, the LPPF and Melbourne 2030? 73
7.5 Does the Amendment highlight any conflict between Melbourne 2030 and other aspects of the planning scheme either in the SPPF or LPPF? 74
7.6 What are the amendment consequences for the LPPF? 74
7.7 Does the amendment make proper use of the VPP? 75
7.8 Does the amendment enhance the planning scheme’s strategic directions, useability and transparency? 76
8 CONCLUSION REGARDING AMENDMENT C22 77
9 PANEL RECOMMENDATIONS 79
Appendix 1 Panel/Advisory Committee Directions Appendix 2 Design and Development Overlay Schedule 4 (DDO4) Appendix 3 Nillumbik Planning Scheme Amendment C10 Panel Conclusions and Recommendations Appendix 4 Land Recommended to be Retained in B1Z Report of Panel Amendment C22 To The Nillumbik Planning Scheme August 2003
1 INTRODUCTION
1.1 APPOINTMENT OF PANEL AND ADVISORY COMMITTEE
The Panel appointed under sections 153 and 156 of the Planning and Environment Act 1987 to consider Amendment C22 to the Nillumbik Planning Scheme, comprised Ms. Cathie McRobert (Chair), Mr. Neal Laird and Mr. Stephen Sully. The Panel was appointed on 10 February 2003.
The Panel must address the Planning Panels Victoria Strategic Assessment Guidelines and the implications of the Metropolitan Strategy.
The Minister for Planning also agreed to the Shire of Nillumbik request that she “call in” application Number 891/2001 for review from VCAT which relates to the use and development of a supermarket and specialty shops on part of the land that is the subject of Amendment C22 to the Nillumbik Planning Scheme. An Advisory Committee with the same membership as the Panel considering the Amendment was appointed on 12 March 2003 to advise the Minister on the application for review.
The Panel appointment relates only to the Amendment where as the Advisory Committee appointment requires the merits of both the Amendment and the application to be considered. The Panel is required to submit its report to the Planning Authority and the Advisory Committee report must be made to the Minister.
The Advisory Committee has prepared a separate report which relates to both the Amendment and application for permit which has been called in by the Minister.
The Panel report sets out Panel and Advisory Committee processes, context, background, scope of both the Amendment and the Application, and planning policy. The references to the parallel Advisory Committee process and the nature of the application for permit that has been referred to the Advisory Committee provide context for the consideration of the Amendment. In the consideration of Key Issues, the evaluation is directed at the merits of the Amendment, with the references to the application serving to illustrate the implications of one form of potential development for part of the DCRBA.
1.2 HEARINGS
A Directions Hearing was held at the Planning Panels Victoria on 6 March 2003 to deal with preliminary matters, scheduling and the exchange of information. On the day of that directions hearing the Panel was advised that the application for review affecting part of the land had been called-in from VCAT by the Minister and that an Advisory Committee would be appointed. It was understood at that time that the Panel and Advisory Committee would have the same membership. It was established that a further Directions Hearing would be necessary because some parties to the application for review are not parties to the planning scheme amendment process.
The second directions hearing was held on Wednesday, 26th March 2003 at Planning Panels. In addition to directions regarding the provision and exchange of information, the following directions were made:
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The Panel and Advisory Committee will have regard to the to the Practice Note Strategic Assessment Guidelines, Ministerial Direction No.7. Plenty Valley Growth Area, Ministerial Direction No.9 Metropolitan Strategy, Planning Panels Victoria, Metropolitan Strategy – Guidelines for Planning Panels, and the zone decision guidelines. The Council must explicitly address these directions guidelines and other parties are also encouraged to have regard to the directions and guidelines when preparing their submissions.
The documentation provided to the Panel did not include the site analysis and descriptive statement explaining how the proposed development responds to the site and its context required pursuant of Clause 19.03-2 of the Nillumbik Planning Scheme. The permit applicant should forward four copies of the statement to Planning Panels Victoria by 12 May 2003. If this information was not submitted with the application, three copies should also be lodged with Council by the same date. The information will be available to submittors at Planning Panels Victoria and the Shire of Nillumbik during normal office hours.
Any amendments to the application for permit must be circulated to the Panel and the parties to the hearing by 2 May 2003.
Council must lodge with planning Panels and circulate to all parties by 27 May 2003 a draft of all conditions which it considers a permit should contain if granted.
Design and Development Overlay Schedule 4 Diamond Creek Road Business Area was adopted by Council on 19 March 2003. The provisions of that proposed overlay must be address by Council in its submission and other parties are encouraged to take the proposed overlay into account in the preparation of their submissions.
Any party intending to call an expert witness to address economic and retailing matters must advise Ms. Michetti, Planning Panels of the name and contact details of that expert witness by Friday 4th April 2003.
Expert witnesses dealing with economic matters or retailing will consult in order to develop a statement of matters on which they agree and matters that are disputed. The consultation between expert witnesses should be completed by 3 May 2003 and a statement should be submitted to Planning Panels Victoria by 10 May 2003. If any expert witness is instructed by a party not to reach agreement in respect of points of difference, the fact of such instructions must be reported in writing to the Panel and Advisory Committee by the expert witness concerned.
As part of the consultative process between economic expert witnesses, the methodology, assumptions and inputs that are relevant to each stage of analysis that contributes to assessments must be clearly explained and documented to enable all parties to gain a clear understanding of the basis of evidence to be presented.
The Panel and Advisory Committee will be assisted if economic impact assessments takes account of the following matters:
The cumulative impact on existing centres arising from the planned or potential development of additional retail floorspace elsewhere within the catchment, in addition to the projected impact on existing centres arising from the potential additional retail floorspace on the subject land. The potential economic impact on existing centres if the whole of the Amendment area was eventually developed for retail use for business purposes. The economic circumstances and trading characteristics of the centres which may be impacted. …….
The letter containing the Panel/Advisory Committee directions is included in Appendix 1.
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The Panel and Advisory Committee hearing was held on of 4th, 5th, 10th, 11th, 12th, 17th, 18th, 19th June and 14 July 2003 at Planning Panels Victoria, except that the hearing on the 17th June the hearing was held at the Nillumbik Civic Centre. Appearances at the hearing are shown below:
Name Hearing Appearances
Shire of Nillumbik Mr. T. Montebello, Ms. J. Moles and Mr. J. Rantino of Maddocks Mr. R. Gibbins of SGS Economics and Planning Mr. C. Bates of SGS Economics and Planning Mr. H. Turnbull of Traffix Group Pty. Ltd. Mr. P. McNabb of Peter McNabb and Associates Pty. Ltd. Dr. J. Wolinski of Ratio Consultants Pty. Ltd.
Roman Catholic Trusts Corporation Mr. I. Pitt SC of Best Hooper Mr. Ian Shimmin of Jebb Holland Dimasi Mr. S. McGurn of Fulcrum Town Planners Pty. Ltd. Mr. C. Butler of Grogan Richards Pty. Ltd. Mr. B. Shaw of the Buchan Group
Banyule City Council Mr. E. Stokans Mr. S. Walker of the City of Banyule
Diamond Valley Development Pty Ltd. Mr. A. Finanzio of Counsel Mr. J. Govenlock, Urbis Pty. Ltd. Mr. John Henshall of Essential Economics
Deal Corporation Mr. A. Wyman
Green Wedge Protection Group Mr. Kahn Franke
Plenty Residents Against Retail Mr. A. Marshman Expansion Mr. T. Cucuzella
Diamond Creek Traders Association Mr. T. Carruthers Mr. N. Hastings
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Eltham Chamber of Commerce and Mr. F. Lynch Industry Mr. Field
Mr. F. Bauer
Lend Lease Real Estate and DB Real Mr. M. Jack of F.R. Perry & Assoc. Pty. Ltd. Estate
Thompsons Pharmacies Mr. M. Williams
NEC & L Nominees Pty. Ltd. Mr. N. Williams Industry Superannuation Property Trust Ms. E. Nolan
The Metropolitan Strategy team within DSE were invited to appear at the hearing but chose to make a written submission only. That submission was circulated to all parties.
The Panel visited the Amendment area, its locality and shopping centres in the potential trade area.
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2 CONTEXT
2.1 THE AMENDMENT AREA AND EXISTING DEVELOPMENT
The subject land is approximately 20 kilometres north east of the Melbourne CBD. The site is within the Shire of Nillumbik close to the boundary with the City of Banyule.
The land affected by the Amendment is on the northern side of Diamond Creek Road, adjacent to its intersection with McLaughlans Lane. The land is irregular in shape with a frontage to Diamond Creek Road of approximately 470 metres and a varying depth of approximately 90 metres to 220 metres, giving the site an overall area of approximately 7.5 hectares. A 20.0 metre wide Melbourne Water easement for a water aquifer pipeline bisects the subject land west of McLaughlans Lane from Diamond Creek Road for a distance of approximately 90 metres.
Part of the land affected by the Amendment is currently occupied by a paving outlet, garden supplies, Safeway service station and ancillary convenience store, auto/tyre service centre and the remainder is vacant land.
Vegetation on the site is limited to small pockets of vegetation along the western side of McLaughlans Lane and to the north towards the residential development in Paperbark Place. A ridgeline with a north-east to south-west axis divides the land to the immediate east of McLaughlans Lane approximately in half. The ‘southern’ portion falls to Diamond Creek Road. The ‘northern’ portion is not visible from the arterial road and has an outlook over developing and abutting residential areas and the Plenty Valley.
Planning application for review no. 891/2001 affects at 259 Diamond Creek Road Greensborough which is part of the land subject to Amendment C22. This site has a frontage of approximately 182 m to Diamond Creek Road and an area of 18690 m2 to the west of the Melbourne Water easement to the west of McLaughlans Lane.
The area is principally accessed by Diamond Creek Road, an arterial road. A bus route with limited services passes the site.
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MAP 1 The Amendment Area, Location of Planning application for review and proposed Zoning.
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2.2 THE LOCALITY
The immediate locality has a mix of residential, commercial and community uses, including: Community uses such as the two places of worship (Diamond Valley Baptist Church and St Thomas the Apostle) the Serbian Centre (Place of Assembly), and St. Thomas primary school; A BP Service Station with car wash, and a lawn mower shop opposite the site on the southern side of Diamond Creek Road and a medical centre to the east of Yan Yean Road; Residential dwellings along McLaughlans Lane, Paperbark Place and Treetop Terrace, with undeveloped land zoned residential owned by the Roman Catholic Church adjoining the site to the north.
There are a number of retail and business centres in the municipality and the neighbouring municipalities servicing a range of catchments from regional to local. The major retail centres include: The regional activity centre Greensborough Shopping Centre (in the City of Banyule) is 2.5 kilometres to the south. Eltham Shopping Centre is approximately 3.5 kilometres to the south-east and Diamond Creek Township is located 2.5 kilometres to the north-east. These town centres are served by train lines and provide for a variety of shopping, community and recreational facilities. Two smaller neighbourhood supermarket based centres with a more localised focus for commercial and retail activities are located in the immediate area of the Amendment area. They are: - St Helena Market Square shopping centre, approximately 1.5 kilometres to the south east. - Apollo Parkways shopping centre, approximately 1.5 kilometres to the north-west which provides more limited convenience retailing to serve nearby education centres, adjacent residential areas and the Shire offices. On the day prior to the commencement of hearings, the owners of Apollo Parkways advised that the centre would close in 2004.
2.3 THE APPLICATION
The Roman Catholic Trusts Corporation for the Diocese of Melbourne applied for a permit (application No. 891/2001/02P) for a supermarket, 11 specialty shops, 253 car spaces, landscaping, signage and access at the property known as 259 Diamond Creek Road, Greensborough on 18 December 2002.
The development proposes total leasable floorspace (GLA) of 4,977 sq.m. which would consist of the following components: • 4,976.72m2 of retail floor area comprising a Coles supermarket of 3,591.86m2 and 11 speciality shops with a total area of 1,384.86m2 which consists of 410 sq.m of food specialty shop floorspace and 975 sq.m of non-food specialty shop floorspace
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• 249 car parking spaces (including 6 disabled spaces) • A minimum 9m wide landscaped strip along the Diamond Creek Road frontage of the site, landscaping around the perimeter of the site and landscaping within the car parking area. • The construction of two new vehicle access points to Diamond Creek Road.
The building design shown in the elevation plans was described as a typical retail design. The supermarket building is proposed to be located approximately 35m from the Diamond Creek Road frontage of the site. Seven of the 11 smaller speciality shops are located along the rear boundary of the site with a 5m wide landscaped strip of land provided between the shops and the property boundary. The supermarket loading bay area is provided along the western elevation of the building away from the front ‘entrance’ of the supermarket. The building is less than 8m in height, with the only exception being at the apex of the vaulted parapet addressing Diamond Creek Road. This vaulted parapet has been provided for aesthetic reasons.
Signage for the speciality shops comprises a typical 6.5m2 illuminated sign upon the parapet of each of the speciality shops. The signage associated with the supermarket comprises two illuminated ‘Coles’ signs.
Supermarket waste will be stored and collected from the supermarket’s loading bay area. Waste associated with the speciality shops is proposed to be stored in the area adjacent to the substation in the north-eastern corner of the site.
Vehicle access to the site will be provided via a new double width crossover to Diamond Creek Road located approximately 45m from the western boundary of the site. This crossover is a minimum 8m in width and will be restricted to left in/left out traffic movements. A second single width vehicle crossover is proposed to be constructed approximately 50m east of the primary access point. This second crossover will be restricted to left out vehicle movements only.
Council sought further information which was submitted by the applicant on 26 April 2002.
The application was advertised to adjoining property owners and occupiers, by a notice on the site and an advertisement in the Diamond Valley Leader. Five objections were received.
The responsible authority determined to refuse the application on the following grounds: 1. The proposed use is inappropriate and does not comply with the State Planning Policy Framework of the Local Planning Policy Framework of the Nillumbik Planning Scheme. 2. The proposal is broadly inconsistent with the Panel recommendation for amendment C10 to the Nillumbik Planning Scheme. 3. The proposal is an overdevelopment of the site. 4. The level of car parking provided is insufficient to deal with the peak demand for the site. 5. The proposed advertising signage is excessive and not consistent with the Character of the area and does not comply with Clause 22.09 of the Nillumbik Planning Scheme- Signage Policy.
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It is noted that prior to the Panel hearing the responsible authority advised with regard to the fourth ground of refusal: The provision of 253 car spaces for the proposed development would be adequate (subject to minor issues of location); although Access to the application site is an issue that is not satisfactorily addressed by the application proposal.
The Roman Catholic Trusts Corporation for the Diocese of Melbourne applied to VCAT to review the decision to refuse the application, challenging each of the responsible authority grounds for refusal.
In accordance with Panel directions, Council circulated draft permit conditions. The applicant challenged some conditions.
2.4 PLANNING FRAMEWORK HISTORY
The planning history for the DCRBA is summarised below.
DCRBA Planning History Local Structure Plan (LSP) for Plenty/Yarrambat area adopted. The DCRBA was shown as ‘Low Density – highway oriented commercial and community uses in a landscaped setting’. 1990 (see 7.1)
The Plenty Valley Strategic Plan and the Plenty Environmental Living Area Outline 1990 - Development Plan (ODP) were prepared. 1992 Subject area zoned Diamond Valley Special Business No.1 Zone for highway related commercial and community activities. Permitted uses included café, take-away food 1992 premises, plant nursery, place of assembly, motel, hotel, medical centre, and retirement village. Shop (other than convenience shop) and unspecified uses were prohibited.
Exhibited new format Nillumbik Planning Scheme, intended to include the area the ‘Business 2’ Zone with a Schedule prohibiting ‘shop’ use. The land was referred to in the 1997-98 schedule to the B2Z but was shown on exhibited zoning map as ‘Business 1 Zone’.
Sept 1999 Diamond Creek Township Strategy (see 7.2) Before the new format planning scheme was referred to the Minister for approval, Clause 22.13 Diamond Creek Business Area Policy was prepared. Residential development was Oct 1999 directed to areas north of the ridge line. Development provisions reflected the former zone provisions. The policy was not approved because it has not been exhibited.
Minister approved the Nillumbik New Format Planning Scheme. The MSS identified the area as “a highway related commercial precinct”. The DCRBA was zoned B1Z with a June 2000 schedule (revised after exhibition) requiring a permit for shop or offices uses with floor area of 5% of lot area or 500m2 (which ever is the lesser).
Application lodged for a supermarket (Aldi). Application for review against failure to grant a permit was lodged with VCAT. Council subsequently resolved not to support the Sept 2001 application.
The Roman Catholic Trusts Corporation lodged the subject application. Council Dec 2001 determined to refuse the application. Application for review was lodged with VCAT but has been called in by the Minister.
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Amendment C10 exhibition and Panel Process. Panel concluded that the proposed rezoning to Business 4 had not been justified. The Panel recommended that the rezoning be abandoned; the DDO be approved with modification to provide discretion relating to Dec 2001 – development standards and to include objectives and criteria to achieve integrated Sept 2002 development; and further work be undertaken relating to lower order commercial centres and to establish the most appropriate use for the DCRBA. (see Appendix 3)
Nillumbik Activity Centres Review completed – see 7.3 Nov 2002 Nov 2002 Amendment C22 to rezone DCRBA to Residential 1 Zone exhibited
The 1989 LSP nominated a limited range of lower order retail uses for the DCRBA. Neighbourhood centre functions (up to 1500 m2) were to be to be located in Plenty, not the Amendment area.
The Diamond Valley Special Business Zone was introduced in 1992 to implement the LSP and reflected these planning intentions by prohibiting all commercial uses other than take away food premises, café, retail plant nursery and restaurant (which were as of right) and bank, convenience shop, hotel, medical centre, reception rooms, veterinary clinic, office to 500 m2 and post office (which required a permit). The zone provided for community uses and accommodation in the form of institutional home, motel and retirement village.
The new format planning scheme maintained the nomination of the area as a highway related commercial precinct in the MSS. It appears that the area was intended to be zoned B2Z1 which has a purpose to encourage the development of offices and associated commercial uses. The schedule to the zone would have prohibited shop by specifying a combined floor area of 0 m2. Accommodation, community uses, industry and offices (after total office floorspace for the zone exceeded 500 m2) required a permit.
Thus between 1989 – 99 there was a clear planning intention to prohibit all but very small scale convenience retail uses.
There was a significant shift in land use intentions for the DCRBA at the time the new format planning scheme was introduced. The new planning framework allowed consideration of a much wider range of commercial uses.
The policy prepared after exhibition of the new format planning scheme provides some insight into the planning intentions for the area at that time, although it was not ultimately approved because it had not been advertised. The policy basis underpinning the objective to provide highway related commercial and community activities explained that:
The area is intended to provide for commercial uses which provide convenience shopping or generally require large sites and benefit from trade and access provided by a main commuter road such as Diamond Creek road.
1 The exhibited planning scheme map appears to have interchanged the intended zonings for the subject area and the Diamond Creek township business area showing them as B1Z and B2Z respectively.
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And that the zone schedule floor area restrictions (on as of right shop and office use) were:
To ensure that small scale commercial uses do not remove opportunities for convenience shopping or larger highway related uses in the area.
Thus, convenience shopping and large scale commercial uses were not only allowed but draft policy suggested that the area was to be preserved for that type of use.
It is also clear that the current B1Z does not directly reflect the strategies expressed in either the LSP or the former Special Business Zone up until 1999. However, the MSS incorporated strategies to ensure that the role and function of the main activity centres, and Diamond Creek township in particular, were not undermined.
Two applications for supermarkets, one with specialty shops, have been lodged in the DCRBA since the B1Z was introduced and both have been rejected by Council. The application for development of the church land has been called in by the Minister and is being currently being considered by the Advisory Committee. The other application, for an Aldi supermarket on land adjoining the church site, has been withdrawn.
Amendment C10 proposed to rezone the DCRBA to a Business 4 and apply a Design and Development Overlay but the rezoning was not supported by the Panel considering the Amendment. The conclusions and recommendations of that Panel are included in 5. It is understood that Council has adopted the DDO4 with some modifications.
2.5 EXISTING ZONES AND OVERLAYS
The land affected by the Amendment is zoned Business 1 Zone (B1Z) under the Nillumbik Planning Scheme. The schedule to the B1Z requires a planning permit for use as a shop or office where floorspace exceeds 500m2 for lots greater than 10,000m2 or 5% of the lot area for lots less 10,000m2. The Panel notes that the floorspace specified in the schedule to the zone “triggers” a permit but should not be treated as an indication of a limit on floorspace. Rather the requirement for a permit where the specified floorspace is exceeded allows evaluation of the merits of the proposal.
The land adjoins a Road Zone which reflects Diamond Creek Road’s status as a Category 1 road. Clause 52.29 requires a planning permit for the creation or alteration of access to Diamond Creek Road.
A permit is required pursuant to Clause 52.06-5 to reduce or waive the car parking requirements of the clause.
Loading and unloading requirements of Clause 52.07 apply.
The Business 1 Zone is subject to category 1 advertising sign provisions of Clause 52.05- 7. Business identification signs exceeding 8 square metres require a permit. Internally illuminated signs exceeding 1.5 square metres or within 30 metres of a residential zone or pedestrian/traffic lights also require a permit. Signs that are above a verandah or more than 3.7 metres above pavement level require a permit.
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There are no overlays affecting the site. However, Design and Development Overlay Schedule 4 Diamond Creek Road Business Area (DDO4) was adopted by Council on 19 March 2003. The Panel directed that provisions of that proposed overlay must be address by Council in its submission and other parties are encouraged to take the proposed overlay into account. The schedule to DDO4 is included in Appendix 2.
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3 THE AMENDMENT
3.1 SCOPE OF THE AMENDMENT
Amendment C22 proposes to: Rezone all land between 259 to 275 Diamond Creek Road, Greensborough and 285 to 307 Diamond Creek Road Plenty adjacent to the intersection with McLaughlans Lane, Greensborough from Business 1 to Residential 1 Zone (See Map 1). In Clause 21.03-4 of the MSS following the clause ending with “in Greensborough and Plenty”, insert the following statement: “Uses appropriate for the area include commercial and community activities that benefit from a main road frontage and which provide a service to the local community. Such uses include education and religious establishments, indoor sporting and community facilities, drive-in restaurant and take-away food activities, a single 24 hour petrol station and convenience store and plant nursery.” In Clause 21.03-4 of the MSS under implementation, delete third dot point “Apply the Business 1 Zone to a highway related commercial precinct adjacent to Diamond Creek Road in Greensborough and Plenty”.
3.2 AMENDMENT EXHIBITION AND SUBMISSIONS
3.2.1 Exhibition
The Amendment was exhibited from 28 November 2002 until 6 January 2003. Council advised that all affected property owners, adjoining land owners and trader groups were consulted through the amendment process. A notice and explanatory report of Amendment C22 was also sent to all people who made submissions in relation to a earlier amendment C10 relating to the land. A public notice of Amendment C22 was placed in the Diamond Valley Leader newspaper on 27 November 2002 and in the Government Gazette on 28 November 2002. An article about Council’s proposal to rezone the land residential was in the December edition of the Nillumbik quarterly newsletter Report to the Community, delivered to all households in Nillumbik.
3.2.2 Submissions
Thirteen submissions to Amendment C22 were received. Eight submissions supported C22, two public authorities raised no objection and three submissions from landowners opposed the amendment.
The application was referred to VicRoads and Melbourne Water. VicRoads did not object to the application but specified a range of conditions.
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Council summarised the key matters raised by objecting submissions as follows: The historical planning for the area has been Business and there is no strategic justification for the amendment. Concern that the further strategic work for the amendment was not made available. Greensborough and Diamond Creek Activity Centres would not be undermined by a local neighbourhood centre at DCRBA, there is clear market demand. The Roman Catholic Trusts Corporation requested that C22 not relate to its land.
The Panel assessment of the key issues associated with the Amendment is provided in Section 6.
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4 PLANNING POLICY
4.1 STATE PLANNING POLICY FRAMEWORK (SPPF)
The policies within the State Planning Policy Framework (SPPF) must be taken into account when preparing amendments. Consideration of planning applications must also address whether the proposal supports the SPPF. Key elements of the SPPF that are particularly relevant to this Amendment are: Clause 14.01 Planning for urban settlement Clause 16 Housing Clause 17.01 Activity Centres Clause 17.02 Business Clause 19.03 Design and built form
Clause 14.01 Planning for urban settlement seeks to ensure a sufficient supply of land for a range of functions and to facilitate the orderly development of urban areas. Future needs should be anticipated and the supply of land should be sufficient to accommodate projected requirements over at least a 10 year period. Consolidation of residential and employment activities is encouraged in existing urban areas. “Major suburban retail, commercial, health, education and cultural developments should be concentrated in and around activity centres with good access to integrated transport nodes.”
Clause 16.01 Housing objectives for single houses include to encourage opportunities for increased residential densities to help consolidate urban areas and well designed medium density housing is encouraged.
Clause 17.01 Activity Centres reinforces the policy intent to focus a range of functions in activity centres with an objective
“To encourage the concentration of major retail, commercial, administrative, entertainment and cultural developments into activity centres (including strip shopping centres) which provide a variety of land uses and are highly accessible to the community.”
Clause 17.01-2 indicates that planning for activity centres should incorporate and integrate a variety of land uses and maximise opportunities for co-location, multiple use and sharing of facilities; provide good accessibility by all available modes of transport (particularly public transport); minimise the effects of commercial development on the amenity of residential areas; and provide attractive environments for community activities. The Panel notes that although the objective refers to “major” developments in particular, the elements promoted in the policy are desirable throughout the activity centre hierarchy, albeit with recognition of the nature of particular centres.
Clause 17.02-2 directs commercial facilities to existing or planned activity centres. However, new freestanding commercial developments may occur in new residential areas which have extensive potential for population growth or will accommodate facilities that improve the overall level of accessibility for the community, particularly by public transport.
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Clause 19.03 Design and built form seeks: “… to achieve high quality urban design and architecture that: Reflects the particular character, aspirations and cultural identity of the community. Enhances the livability, diversity, amenity and safety of the public realm. Promotes attractiveness of towns and cities within broader strategic contexts.”
For non-residential proposals, regard to design principles relating to context, public realm, landmarks, views and vistas, pedestrian spaces and heritage is required. This clause directs that a comprehensive site analysis should be the starting point for the design process and form the basis for consideration of height, scale and massing of new development.
The SPPF establishes (a perhaps self evident) basic principle of planning that it should anticipate future needs. It also extends the planning brief beyond the satisfaction of clear basic requirements, to promoting diversity of choice, economic viability, accessibility and a high standard of urban design and amenity. These principles are all clearly relevant in the evaluation of the Amendment and the Application.
The SPPF indicates a clear predisposition in favour of locating major new retail development in established activity centres that are the focus of a range of activities and are well served by public transport but recognises that the availability of public transport will vary from area to area. The planning outcomes sought for activity centres identified in Clause 17.01-2 should underpin the various aspects of the planning process, from identification of optimum activity centre location through to more detailed development planning in identified activity centres.
The SPPF directs new commercial development to existing or planned centres but recognises that new activity centres need to be planned to meet obligations to anticipate future requirements.
4.2 MELBOURNE 2030
Melbourne 2030 has been adopted by the Victorian Government as a statement of government policy. Documentation associated with Melbourne 2030 indicates that it is to be regarded by all planning and responsible authorities as a “seriously entertained strategic plan and policy statement” which should be considered in planning decision making.
The Panel was directed to a recent VCAT decision O’Connell Street Developments Pty Ltd v Yarra City Council (2003) VCAT 448 which indicated that Metropolitan Strategy (as distinct from the associated series of Draft Implementation Plans) should be considered as final and adopted strategic plan or policy but the implementation plans are not a seriously entertained Amendment. The Tribunal formed the view that: The Tribunal’s obligation in making planning decisions is to apply the current planning scheme and in doing so is obliged under section 60(1) (b) (ii) and (iii) to have regard to the Metropolitan Strategy. The Implementation Plans, as discussed in paragraph 52 above, would not appear to be a relevant consideration under Section 84B(1)(f).
16 Report of Panel Amendment C22 To The Nillumbik Planning Scheme August 2003
Ministerial Direction No 9 Metropolitan Strategy requires the planning authority to have regard to the Metropolitan Strategy in preparing an amendment and also requires the amendment explanatory report to address a series of questions relating to the whether the Amendment is consistent with and supports the Metropolitan Strategy.
4.2.1 What aspects, if any, of Melbourne 2030 are relevant?
• Direction 1 - a more compact city
In seeking to create a more compact city, Melbourne 2030 seeks to “take full advantage of existing settlement patterns, investment in infrastructure such as transport and communications, water and sewerage and social facilities” (pg 30). Melbourne 2030 encourages concentration of new development within a network of activity centres, both existing and planned, that are near current infrastructure and in areas best able to cope with that change.
The key Melbourne 2030 objectives for the development of activity centres are:
“Reduce the number of private motorised vehicle trips by concentrating activities that generate high numbers of (non-freight) trips in highly accessible locations. Encourage economic activity and business synergies Broaden the mix of uses appropriate to the type of centre and the needs of the population served Provide focal points for the community at different geographic scales Improve access by walking, cycling and public transport to services and facilities for local and regional populations Support the development of the Principal Public Transport Network” (pg 46)
These directions are reflected in the proposed SPPF Draft Clause 12 policies 1.1 and 1.2.
Melbourne 2030 identifies more than 100 Principal and Major Activity Centres which are larger centres with greater mix of functions.
Although submissions and evidence presented to the Panel focussed on higher order centres, Melbourne 2030 also emphasises the importance of establishing a strong network of neighbourhood activity centres to promote ESD objectives of access for pedestrians and cyclists, to achieve strong local community foci and to provide convenient locations for local needs.
Lower order neighbourhood centres are to be identified by local councils. From a metropolitan perspective, these centres contribute to the goal of encouraging walking, cycling and local public transport use, particularly where they are part of a network of centres. (pg 49)
Their (Neighbourhood centre) key features are: • “Generally a limited mix of uses meeting local convenience needs • Generally less than 10,000 square metres of retail floor space • Accessible to a viable user population by walking/cycling • Accessible by local bus service, and public transport links to one or more Principle or Major Activity Centres • Their role as important community focal points, ideally close to schools, libraries, child care, health services, police stations, and other facilities that benefit from good public transport.” (pg 49)
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Proposals for development or expansion of activities remote from activity centres will be discouraged by giving preference to locations in or on the edge of an existing activity centre. In relation to ‘out-of-centre’ developments Melbourne 2030 states that:
“New single-use retail, commercial and recreational facilities that are remote from other attractions and from public transport generate, in aggregate, more car trips and longer journeys than similar facilities that are co-located and more easily accessible. Where development takes place distant from an activity centre, that is, ‘out-of-centre’, it is harder to provide equitable access to services and facilities for all the population. This form of development does not contribute to a local sense of place, and encourages people to use their cars more, thus increasing costs to the community. It can also divert the activity necessary to sustain a thriving and diverse range of accessible services at existing activity centres” (pg 55).
Melbourne 2030 makes it clear that out-of-centre proposals will only be considered where it can be “convincingly demonstrated that the proposed use or development is of net benefit to the community in the region served by the proposal” (pg 55).
Melbourne 2030 Policies within Direction 1 are to: “1.1 Build up activity centres as a focus for high-quality development, activity and living for the whole community 1.2 Broaden the base of activity in centres that are currently dominated by shopping to include a wider range of services over longer hours, and restrict out-of-centre development 1.3 Locate a substantial proportion of new housing in or close to activity centres and other strategic redevelopment sites that offer good access to services and transport”
• Other relevant Melbourne 2030 policies
Other policies contained within Melbourne 2030 of particular relevance to Amendment C22 and Application for Review No. 891/2001 include: promoting good urban design (Policy 5.1); recognising and protecting neighbourhood character and sense of place (Policy 5.2); encouraging neighbourhood design that makes people feel safe (Policy 5.3); promoting neighbourhood design to create attractive, walkable communities (Policy 5.5); and planning for more accessible jobs and community services (Policy 8.3).
4.2.2 How do those aspects of Melbourne 2030 affect the amendment or proposal?
Melbourne 2030 identifies Greensborough (in the City of Banyule) as a Principal Activity centre and Diamond Creek and Eltham (within Nillumbik Shire) as Major Activity Centres. Melbourne 2030 makes it clear that these centres should be supported. They should be planned as focal points for the community, economic activities and synergies should be encouraged and the range of uses should be broadened.
Melbourne 2030 does not identify individual Neighbourhood Activity Centres, but acknowledges their role as important local community focal points and provides guidance on how they should be planned.
The DCRBA is not designated as a Principal or Major Activity Centre in Melbourne 2030. In the Nillumbik MSS the DCRBA is identified as a highway related commercial precinct. The Nillumbik Activity Centres Review, which was released for community consultation in January 2003, proposed Neighbourhood Activity Centres designation of
18 Report of Panel Amendment C22 To The Nillumbik Planning Scheme August 2003 two centres in the general vicinity of the DCRBA -Apollo Parkways and Plenty. The review did not include the DCRBA in the proposed designation of neighbourhood centre but stated that:
The DCRBA site is recommended to be designated the ‘Diamond Creek Road Commercial and Community Area” and that an urban area Local Convenience Centre be incorporated (definition – single convenience shop restricted to 200sqm.).” (pg 33)
The issue of whether the DCRBA should be consider a planned activity centre is discussed in the Key Issues section 6.4.
There was general consensus amongst all those participating in the hearing that Melbourne 2030 strengthens the long established State planning policy to give preference to activity centres for new retail development. There was also agreement that the following sequential test enunciated in Mr. Shimmin’s evidence, should be applied to consideration of proposals for retail development: 1. All new retail developments should generally be located in designated centres if possible. 2. If new retail developments cannot be accommodated within existing centres the next preferred location is on or near the edge of a centre. 3. If a retail development cannot be accommodated either within or at the edge of an existing centre, an out of centre location could then be considered pending consideration of the net community benefits.
4.3 LOCAL PLANNING POLICY FRAMEWORK (LPPF)
The Banyule Planning Scheme MSS (Clause 21.04-2) indicates that the municipality has a well distributed network of established activity centres which have broad functions. It seeks to consolidate and reinforce the existing hierarchy of centres to enhance their existing roles. Greensborough, which is close to the DCRBA, is recognised as Banyule’s major commercial activity centre and planning objectives include “reinforcing the regional status of Greensborough District Centre as the main shopping, business and entertainment centre serving the north east region of outer metropolitan Melbourne.”
Clause 21.03-4 Economic Development in the Nillumbik MSS identifies Eltham Town Centre and Diamond Creek Township as “the main commercial activity precincts in the Shire”, and lists a number of other smaller local centres. The subject area is identified as follows “A highway related commercial precinct is located adjacent to Diamond Creek Road (at the intersection with McLaughlans Lane) in Greensborough and Plenty.”
Clause 21.05-4 Economic Development Objective 2 is:
To promote Eltham Town Centre and Diamond Creek as the main commercial and community activity areas in the Shire, and support the viability of these areas.
Strategies to achieve this objective include concentrating major retail activities in those two centres; facilitating a range of improvements to those centres; and ensuring that:
“use and development in the Diamond Creek Road Business Area does not detract from the retail role and function of Diamond Creek township.”
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There was agreement amongst all parties that the MSS establishes two clear policy directions which are central to the evaluation of both the Amendment and the Application. They are: 1. That Eltham and Diamond Creek will be promoted as the two main centres in the municipality; and 2. That development of the Amendment area should not detract from the retail role and function of Diamond Creek.
The MSS also states that the economic strategies will be implemented by applying the B1Z to established retail areas and to “a highway related commercial precinct adjacent to Diamond Creek Road in Greensborough and Plenty”.
The MSS indicates that the future use and the development of the Amendment area should be highway related commercial uses, but the Amendment proposes that the statements in the MSS be strengthened to further define appropriate uses for the area. The Amendment includes the following additional statement which indicates preferred uses for the area:
“Uses appropriate for the area include commercial and community activities that benefit from a main road frontage and which provide a service to the local community. Such uses include education and religious establishments, indoor sporting and community facilities, drive-in restaurant and take-away food activities, a single 24 hour petrol station and convenience store and plant nursery”
With regard to residential development, the MSS recognises that outward metropolitan development will not be a significant feature in the municipality and population growth will not be substantial. The MSS framework plan indicates that residential development should be focussed in existing township/urban areas. Existing residentially zoned land in the Plenty residential area extending from Plenty River Drive north to River Avenue is identified as an area for further residential subdivision (1000 – 2000m2 lots). Medium density housing should be focussed in close proximity to commercial, community, public open space ad public transport routes and strongly discouraged in areas where such services, facilities and infrastructure are not available (see Clauses 21.03-1, 21.04-4, and 21.05 – 1).
The Clause 22.01 Medium Density Housing Policy directs medium density housing to Eltham, Diamond Creek and Hurstbridge town centres. It also promotes consideration of medium density housing opportunities at the planning stage of residential subdivision. There is a strong theme of ensuring that the siting and design of medium density housing development is compatible with the existing character of an area.
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5 STRATEGIC PLANNING STUDIES
The subsequent discussion of key issues will refer back to strategic planning analysis of activity centres in Nillumbik generally, Diamond Creek and the Amendment area. These planning studies are briefly discussed below.
5.1 LOCAL STRUCTURE PLAN (LSP) FOR PLENTY/YARRAMBAT
The 1989 Local Structure Plan (LSP) for Plenty/Yarrambat indicated that Plenty should be reinforced as the neighbourhood shopping and community centre to serve the area south of Kurrak Road. Plenty was identified as the location for convenience retail facilities, professional services, expansion of the primary school, preschool and the like. It was suggested that additional commercial floor area in the order of 1500m2 could be accommodated in Plenty.
The LSP for Plenty/Yarrambat area showed the Amendment area as ‘Low Density – highway oriented commercial and community uses in a landscaped setting’.
The background report found that: ‘the area is considered appropriate for commercial and community uses having regard to its main road frontage, the nature of the existing uses in the area and on the opposite side of Diamond Creek Road (ie petrol station and plant nursery) and relatively low residential amenity due to its main road frontage and its visual remoteness from the study area.” “ Uses appropriate for the area include commercial and community activities that benefit from a main road frontage and which provide a service to the local community. Such uses include education and religious establishments, indoor sporting and community facilities, drive-in restaurant and take-away food activities, a single 24 hour petrol station and convenience store, plant nursery etc.’ “Large display based retail and peripheral sales activities, motor vehicle sales or industrial uses are not considered appropriate.” Stringent guidelines should be applied to development to ensure attractively designed buildings and low density development in a landscaped setting.
The Panel considers that this document provides insights into the planning history of the site and is required to be taken into account by Ministerial Direction No .7. However, the document is dated and some strategies have changed since it was prepared eg the role and extent of further development at Plenty.
5.2 DIAMOND TOWNSHIP CREEK STRATEGY
The 1999 Diamond Creek Township Strategy proposed a range of strategic actions which sought to "limit expansion of retailing activity" and "consolidate retail activity in one key precinct at Plaza centre." Retail expansion was restricted to:-
• the redevelopment of the surplus Public Transport Corporation land located south of the railway line (which has since been developed into the Diamond Creek Station Shopping Centre, anchored by the abovementioned BiLo supermarket), and
• a small area west of the Plaza centre to Brooks Crescent.
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The Panel is satisfied that the recently formulated planning strategy for Diamond Creek did not countenance any major expansion of the retail centre, beyond the development of the Diamond Creek Station development, nor did it identify land for such expansion.
5.3 NILLUMBIK ACTIVITY CENTRES REVIEW
On the recommendation of the C10 Panel, Council commissioned further work on activity centres and the future of the DCRBA. The explanatory report for Amendment C22 indicated that the additional work undertaken by consultants, SGS Economics and Planning Pty Ltd in the report “Nillumbik Activity Centres Review, November 2002” supports Amendment C22. The review was released for consultation towards the end of the exhibition period for Amendment C22.
The Activity Centres Review was premised on an interpretation of the policy framework that: …new commercial retail services are intended to be accommodated in existing centres where a critical mass of facilities can be achieved to enable a higher level of service to be offered. Any diversion from this direction would need to demonstrate fundamental shortcomings in the approach and would need to clearly establish that the very clear policy objectives relating to activity centres can be met.
The analysis suggested that the limited population growth in the municipality translates to limited additional retail floorspace being able to be supported in the order of 9,000 m22 to 2010.
The review found that the existing network of activity centres evolved in parallel with the pattern of urban development, established centres are supported by community uses and, other than Apollo Parkways, are long standing with good access from the road network. The two main activity centres also benefit from their location on the Principle Transport Network.
The review indicated that the DCRBA is less accessible to existing dwellings in Nillumbik than either Eltham or Diamond Creek. Existing activity centres were considered to perform better than the DCRBA in terms of evaluation criteria of encouraging multi-purpose trips, encouraging non-car trips, supporting public transport and creating a critical mass consistent with the designated roles of activity centres.
The Panel questions the relevance of the analysis of the accessibility of the DCRBA in terms of accessibility for all existing Nillumbik residents. Firstly, as a lower order centre a more localised approach to analysis of accessibility is appropriate. Secondly, it is more relevant to consider the site’s accessibility in relation to its catchment rather than to the whole of the Nillumbik municipality. The DCRBA’s location near the municipal boundary means that it is remote from many Nillumbik households but this it may provide an accessible location to its likely catchment which does not reflect municipal boundaries. Further, new development in the immediate area will enhance the site’s accessibility to a catchment population in the future.
2 The report indicated 7,497m2 which was revised to 9,235 in view of revised demographic data.
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The review recommended an activity centre classification which adopted the Melbourne 2030 designation of Eltham and Diamond Creek as major activity centres. These centres were identified as the locations for most of the additional floorspace that could be sustained (4,500m2 and 3,000m2 respectively). Apollo Parkways was designated as a Neighbourhood Centre to be consolidated without providing additional retail floorspace and Plenty was identified as a rural area Local Convenience Centre with provision for expansion to 600 m2 with no individual shop greater than 200m2.
The DCRBA was designated as an urban area Local Convenience Centre to be limited to a single convenience shop restricted to 200m2. The DCRBA was not designated as a neighbourhood centre as such a classification would undermine other activity centres including Apollo Parkways.
The report also recommended: • Future review of policies in the planning scheme • The preparation of planning scheme amendments to reflect the classifications proposed. As an interim measure the DCRBA should be rezoned to R1Z which, despite the primary purpose being for dwellings, “can facilitate the intended highway related uses intended for the area which has been in place for well over a decade”. • Undertake structure plans with structure planning for Eltham and Diamond Creek being prepared in the short term. Due to current proposals for the DCRBA it was recommended that a draft structure plan be prepared for the DCRBA forthwith.
During the hearing Mr. Pitt and Mr. Finanzio suggested that the review was primarily a reaction to applications for development within the DCRBA and there was an undue focus on the DCRBA. They highlighted Council resolutions prior to appointment of the consultants, as well as the consultants’ evidence to the C10 panel which supported rezoning of the DCRBA as indicating that this review had been undertaken in the context of a predetermined position to support rezoning of the DCRBA.
The Panel agrees that it was appropriate for the review to proceed on the basis that the existing activity centres should be strengthened. This is not unreasonable in the context of the existing planning policy framework and directions within Melbourne 2030 which establishes the designation of higher order centres in the activity centre network. In the circumstances, it was also understandable that the report specifically addressed the future of the DCRBA.
However, the review did not include any significant analysis of the desirable role and distribution of lower order centres. It could have been expected that this would be a major focus of analysis for the Activity Centres Review given that Melbourne 2030 addresses higher order centres. For example, in the vicinity of the subject site, the 1989 LSP role for Plenty was not revisited despite the time that had elapsed since the LSP was prepared and changes in circumstances such as the closure of the school.
Nor did the review consider from first principles the most appropriate future for the DCRBA. Again, the review simply adopted the description of uses presented in the 1989 LSP. The Panel is concerned by the review’s apparently unquestioning acceptance of the 1989 LSP expectations for the DCRBA which translate to a string of unrelated non residential uses along a main road.
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The Panel does not consider that the review adequately describes the current and future network of activity centres required to meet the needs of the Nillumbik community and fails to identify the range of strategies, policies and initiatives that Council or other parties will need to pursue in order to pursue either its own Activity Centre policies or the Activity Centre objectives of Melbourne 2030.
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6 THE FUTURE OF THE DCRBA - KEY ISSUES
The preceding discussion of state and local planing policy suggests the following key issues: • Is the DCRBA a planned neighbourhood activity centre? • Should the potential for additional retail floorspace be directed to established activity centres? • Can established activity centres accommodate potential retail expansion? • Would development of the DCRBA for intensive retailing detract from the retail role and function of established activity centres, particularly Diamond Creek? • Is there a need for an additional neighbourhood activity centre? • Has it been convincingly demonstrated that there would be a net community benefit if the DCRBA is developed as a neighbourhood activity centre? • Is the proposed Residential 1 Zoning appropriate?
Before considering these strategic planning issues, the Panel will first address whether the Amendment is justified to correct a zoning error made when the new format planning scheme was introduced.
6.1 DOES THE CORRECTION OF A ZONING ERROR JUSTIFY THE AMENDMENT?
The Amendment explanatory report indicates under reasons for the amendment: “The inappropriate zoning of the land occurred when the new format Nillumbik Planning Scheme was approved in June 2000. The error in the Planning Scheme became apparent when Council received two town planning applications for supermarkets on this land, one from Aldi Supermarkets for 1300m2 of retail and one from Coles Supermarkets for approximately 5000 m2 of retail based around a major supermarket and specialty shops. These proposals do not reflect Council’s vision for development in the area.”
Consideration of Amendment C10 set out the history of planning provisions affecting the DCRBA in considerable detail3. The C10 Panel conclusion in relation to the error when the new format planning scheme was introduced are repeated below.
“The Panel accepts that there was an error when the new scheme was exhibited. However, the planning framework for the DCRBA put forward by Council for approval after exhibition of the new planning scheme suggests that it had considered the particular circumstances of the DCRBA site. The planning framework put forward included:
• an indication in the MSS that development in the DCRBA should not undermine the role and function of Diamond Creek;
• specific reference to the DCRBA in the Business 1 Zone schedule so as to require a permit for larger shops; and
• a local policy which provided land use guidance indicating that “The area is intended to provide for commercial uses which provide convenience shopping or generally require large
3 See section 5.2.2 Panel Report Nillumbik Planning Scheme Amendment C10 September 2002
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sites that benefit from trade and access provided by a main commuter road such as Diamond Creek Road”. The policy also set out development requirements. The policy was not approved because it had not been exhibited.
The Panel notes that, even without the proposed policy, the approved planning framework was more consistent with Council’s strategy to promote a highway related commercial area at the DCRBA than the originally intended Business 2 Zone which prohibited all shops. It was also more consistent with planning reform principles to allow consideration of the merits of proposals within a strategic framework. The Panel does not accept that the Amendment can be justified on the basis of correcting an inadvertent mistake.’ (pg 67-68)
Although this Panel acknowledges that an inadvertent error was made when the new format planning scheme was introduced, it agrees with the earlier C10 Panel’s conclusion that the justification of the Amendment cannot rely on correcting errors in the exhibition of the new format planning scheme as the primary justification for changing the zoning in the approved planning scheme.
Mr. Pitt and Mr. Finanzio argued that objectives of planning to provide fair, orderly economic and sustainable use and development (section 4(1)) obliges Council to establish a clear strategic foundation for rezoning requests.
The Panel also agrees with the C10 Panel that
“….. the planning scheme as a whole does provide guidance about the nature of use and development of land through the LPPF, the zone provisions (including its purpose) and overlays. This guidance then contributes to land use and development expectations. The Panel agrees that the public interest is not served if changes to planning scheme provisions are not clearly justified.”
Irrespective of the path to approval of planning scheme provisions, orderly planning requires confidence that stakeholder decisions can be based on the guidance provided by an approved planning scheme. There is an onus on the planning authority to justify any change proposed in the Amendment, including where the development potential of land is reduced.
However, the Panel does note that a reasonable interpretation of the planning policy framework for the DCRBA and the schedule to the B1Z, attach significant qualifications on the development expectations that would normally be associated with a standard B1Z. A shop use of more than 500 square metres or 5% of the site is not an as of right use in the DCRBA under the current planning framework. Further, the planning framework makes it clear that development of the DCRBA should not undermine the role and function of Diamond Creek in particular.
6.2 SHOULD ADDITIONAL RETAIL FLOORSPACE BE DIRECTED TO ESTABLISHED ACTIVITY CENTRES?
There was agreement amongst the planning experts that both state and local planning policy expresses a strong preference for development within existing activity centres. In the vicinity of the DCRBA the main activity centres are Greensborough (identified as a principal activity centre in Melbourne 2030), Eltham and Diamond Creek (identified as major activity centres in Melbourne 2030).
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It was also common ground that the extent of floor space that could be supported in Nillumbik is limited (see discussion in 8.3).
Mr. McNabb, Mr. Gibbins and Mr. Stokans argued that this limited retail floorspace should be directed to the established activity centres which would contribute to the “building blocks” or “critical mass” to assist in attracting non-retail services, thereby broadening the functions of the activity centres. The community has made significant investment in these centres and the community benefits through more effective use of infrastructure and transport as well greater opportunities for multi-purpose trips. Mr. Stokans highlighted that conventional trade area analysis may demonstrate whether additional retail opportunities can be sustained but does not adequately take into account these benefits to the community.
Mr. Field, who appeared for the Eltham Chamber of Commerce and Industry, emphasised the importance of existing activity centres as a focus for services that support the community. He highlighted implications of dispersed retail opportunities in “out of centre” locations with poor access by public transport for youth, the elderly, people with disabilities and families.
It was also argued by those supporting the amendment that new activity centre on the amendment site is not needed because the community is adequately served by the type of goods and services proposed. It was noted that there are 8 supermarkets within 5 minutes of the DCRBA and that the major supermarkets are well represented in the area.
Mr. Finanzio and Mr. Pitt argued that whilst the planning framework establishes a test that the role and function of Diamond Creek should not be undermined, this does not mean that development that does not threaten that centres role should be rejected. It was also argued that the planning scheme is not intended to provide protection to established businesses from competition and it is competition that is likely lead to responses by established centres that reinvigorate them and improve services to the community. They suggested that community interests would be served by increased retail choice and improved access to additional convenience shopping opportunities at the DCRBA for consumers in its catchment. The issue of impacts on other centres is discussed in 6.3.7 and whether development in the DCRBA for convenience retailing would result in a net community benefit is considered in sections 6.5 and 6.6.
While those opposing the Amendment acknowledged that planning policy directs core retail development to established activity centres first, they suggested that there are real difficulties in realising significant development in the established centres whereas the DCRBA provides a greenfield site which is zoned for retail functions and is immediately available for development.
The Panel will now consider the apparent opportunities to accommodate additional retail floor space in the established activity centres.
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6.2.1 Opportunities and Constraints in Diamond Creek
The planning policy framework clearly supports the maintenance and strengthening of the role and function of Diamond Creek.
Those supporting the Amendment and opposing the application acknowledged that Diamond Creek currently fulfils a more limited role than would normally be associated with a major activity centre designation under Melbourne 2030. Mr. McNabb noted that a Melbourne 2030 Major Activity Centre would normally be expected to consist of at least 20,000 – 30,000 sqm whereas Diamond Creek currently has total floorspace of approximately 14,000 sqm. He highlighted the strengths of the centre which include a reasonable retail and service mix, low vacancy rates, it role as a community hub and its location on the principal public transport network. However, he identified a number of weaknesses which included the lack of a full range supermarket of more than 3,000 sqm. Mr. Wyman emphasised that the current Bi-Lo supermarket provides an extensive range of goods that meet consumer’s weekly shopping needs although it is not in the particular size/format currently adopted by Coles and Safeway.
Mr. McNabb and Dr. Wolinski also acknowledged that the centre’s location on the fringe of the metropolitan area and catchment characteristics would limit the extent of expansion of the centre that could be sustained.
Council acknowledged that the 1999 Diamond Creek Township Strategy sought to "limit expansion of retailing activity" and "consolidate retail activity in one key precinct at Plaza centre." The only land identified for retail expansion was the land adjoining the railway line, which has since been developed by Deal Corporation, and a small area west of the Plaza centre to Brooks Crescent.
However, Council advised that a review of the strategy was recommended in the recent Activity Centres Review and $95,000 has been committed for the purpose in Council’s budget for next year.
The November 2002 Review of Activity Centres recommended that the structure plan for Diamond Creek should facilitate in the order of 3,000 sqm retail floorspace, including 1,800 of supermarket space by 2010 plus approximately 1,200 sqm of non-retail floor space. In his evidence to the Panel, Mr. Gibbins submitted that the apparent difficulties in expanding supermarket floor space in Diamond Creek are not unique. A range of options exist and land values would not be prohibitive when there is a clear market demand, provided that “easier sites” are not available.
Mr. McNabb’s evidence identified the following opportunities to expand Diamond Creek’s floorspace: • Further development of land around the railway precinct for retail uses • Redevelopment of the Foodworks supermarket with adjacent areas • Consolidation and redevelopment of the industrial and other sites east of George Street/Wensley Street for retail and other mixed use development • Development of stronger retail and commercial links between the Chute Street and Hurstbridge Road parts of the centre.
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At the hearing the Diamond Creek Traders advised that, pending the outcome of these proposals for the DCRBA, Mr. N. Hastings, who owns the Mitre 10 store that adjoins the Station development intends to relocate the hardware store to consolidate functions on a large site he owns to the east in Hurstbridge Road. This would accommodate additional floor space in the order of 2,000 sqm. Mr. Hastings appeared at the hearing and confirmed these proposals.
Those opposing the Amendment C22 emphasised that: • The Diamond Creek catchment limits the potential to sustain substantial expansion of the centre. • The planning strategies for Diamond Creek, including the recent SGS Review of Activity Centres, have not identified any realistic short term options for providing larger retail uses; • The proposal to relocate the Mitre 10 store and redevelop the site only emerged at the hearing and could not be given any weight; • The requirement for land consolidation is also a significant deterrent to redevelopment. • All of the options identified require further evaluation, public consultation and rezoning of land.
The Panel has already commented that the clear policy position in favour of supporting established activity centres is not disputed. The Melbourne 2030 designation of Diamond Creek as a Major Activity Centre recognises that Diamond Creek currently has a sound base for a strengthened role to take advantage of existing investment in infrastructure, notably fixed rail, to provide for multi-purpose trips and to promote public transport trips. Melbourne 2030 indicates that Diamond Creek’s role should not only be preserved but it should be broadened.
The Panel also accepts the view that the amount of floor space that can be supported in Nillumbik in the medium term is limited and this makes it important that viable retail development is directed to locations that support planning policy. Diamond Creek is likely to remain one of the smaller Major Activity Centres in Melbourne due to the centre’s catchment characteristics and the relatively modest expansion of retail floorspace in the centre recommended in the Activity Centre Review (3,000m2). However, this represents a significant proportion of the floor space that is likely to be sustained in the municipality/trade area. Supermarkets are clearly important anchors which are vital to attract consumers to a centre such as Diamond Creek. The maintenance of strong supermarkets in local centres supports other functions including speciality shops and is important to the role and vitality of the centre as a whole. Planning should ensure that decisions to locate supermarket floorspace elsewhere does not preclude improved supermarket opportunities, and the typical specialty retailing activities that accompany supermarkets, in key activity centres.
The Committee accepts that there are not currently any appropriately zoned sites that are immediately available for significant retail expansion in Diamond Creek. However, the Panel believes that diversion of a significant proportion of the limited sustainable floorspace potential to out of centre locations would undermine the viability of potential development options in Diamond Creek.
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The combination of the following factors mean that it is in the community interest to preserve the opportunity to explore those options for additional retail floor space in Diamond Creek: • The absence of an urgent need to provide additional convenience shopping options (discussed in section 6.5), • Diamond Creek’s designation as a Major Activity Centre • The Council commitment to undertake further structure planning for Diamond Creek in the short term, and • The apparent options for in centre development worthy of investigation, notably on the “Hastings” land.
6.2.2 Opportunities and Constraints in Other Centres
6.2.2.1 Greensborough
The City of Banyule argued that retail activity proposed at the DCRBA should be directed to Greensborough which is designated as a Principal Activity Centre in Melbourne 2030 and is accorded comparable status in activity centre hierarchy in the Banyule MSS (Clause 21.04-2) and the Nillumbik MSS. Similar principles of supporting designated activity centres noted above also apply to Greensborough.
Mr. Jack, who appeared for Lend Lease (the owners of Greensborough Plaza Regional Shopping Centre), supported that view and suggested that the proposed development on the DCRBA for a supermarket and specialty shops would undermine the viability of both the Greensborough Plaza and the Principal Activity Centre as a whole.
The City of Banyule expressed concern that additional retail development at the DCRBA will reduce and/or delay the opportunities for expansion at Greensborough and undermine the future viability of the centre. These submissions noted that the Greensborough Principal Activity Centre Local Structure Plan March 2003 (adopted in April 2003) foreshadows substantial additional retail floor space in Greensborough and identifies several potential sites for redevelopment. The Structure Plan suggests that Greensborough requires 26,000 m2 by 2009 and an additional 18,700 m2 by 2021 to maintain the centre’s current market share. A number of potential sites have been identified and a detailed action plan is currently being prepared.
Those opposing the Amendment argued that a supermarket based development serving local community convenience shopping needs would not compromise development at Greensborough which serves regional functions. Mr. Pitt went so far as to submit that:
“the suggestion that the proposal would adversely affect the role or function of the Greensborough District centre is fanciful.”
Further, it was argued that, apart from additional floorspace currently under construction, the options for additional floor space at Greensborough are merely possibilities, have not been tested and would be dependant on amendment of the planning scheme.
Planning policy clearly supports strong Principal Activity Centres. While the Panel is not in a position to comment on proposals in Greensborough, it acknowledges that there are
30 Report of Panel Amendment C22 To The Nillumbik Planning Scheme August 2003 potential future retail development opportunities. The Committee recognises that the DCRBA and Greensborough fulfil vastly different functions in the retail network. To the extent that further development in Greensborough may include floorspace for food/supermarkets and that there is some common trade area with the DCRBA, development of the DCRBA could be expected to have some influence on the viability of proposals at Greensborough but that influence would be likely to be minimal (see Discussion in 8.3.7).
6.2.2.2 Eltham
The Eltham Chamber of Commerce and Industry also highlighted Nillumbik and Melbourne 2030 planning policy and advocated directing retail development to established centres. They noted that there are a number of opportunities for retail expansion in Eltham. eg near the railway station, expansion of the mall and near Bunnings.
The Panel notes that impacts on Eltham from development of the DCRBA would be more limited than for centres that are closer to the subject area (see section 6.3.7). The Panel has not evaluated any of the potential development opportunities suggested at the hearing.
6.2.2.3 St. Helena
St. Helena is the closest established centre to the DCRBA and is also a supermarket based centre with specialty shops. It is nominated in the Banyule Planning Scheme MSS Clause 21.04-2 map as a neighbourhood centre.
Mr. Shimmin suggested that the demonstrated performance of the centre, its location which is central to the catchment, and catchment characteristics make it a highly desirable location for retail expansion.
Expansion of the St. Helena site is currently limited by it location adjoining a freeway reserve and the Melbourne Water pipe track. However, at the hearing, the City of Banyule submission indicated that it is on the public record that the State Government has made a commitment not to extend the ring road through Nillumbik. Therefore the future of the reservation is uncertain and the land could provide an option for expansion of the shopping centre.
The Panel notes that many of the weaknesses that apply to the DCRBA, such as limited public transport and few non-retail functions also apply to St. Helena. Any potential for expansion of the centre is currently only hypothetical. It would be dependant on firm decisions about the future of the land reserved for roads, and strategic assessment of the community benefits that may be achieved as a result of such expansion.
6.2.2.4 Apollo Parkways
Apollo Parkways is a small neighbourhood centre of approximately 1,370 sq.m. which includes an IGA supermarket of approximately 565 sq.m and a limited range specialty shops. The Apollo Parkways centre currently includes approximately 265 sq.m of vacant floorspace. To the immediate north of the centre is a residential development, the Apollo Parkways Primary School adjoins to the site.
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The size of the site limits any expansion of this small centre. The owners of the centre advised the Panel that the centre will close in 2004. Therefore its future use remains uncertain but expansion of the centre appears unlikely, particularly given the centre’s past performance.
6.3 WOULD DEVELOPMENT OF THE DCRBA FOR INTENSIVE RETAILING DETRACT FROM THE RETAIL ROLE AND FUNCTION OF ESTABLISHED ACTIVITY CENTRES, PARTICULARLY DIAMOND CREEK?
6.3.1 Economic Assessment
Economic evidence concerning the forecast impact on existing retail centres resulting from the establishment of the proposed Coles store and specialty shops on the subject land was presented to the Panel by Mr. Roger Gibbins and Mr. Chris Bates of SGS Economics and Planning (on behalf of Nillumbik Shire Council), Dr. Jeffrey Wolinski of Ratio Consultants (also on behalf of Nillumbik Shire Council), Mr. Ian Shimmin of JHD Advisors (on behalf of the Roman Catholic Trusts Corporation) and Mr. John Henshall of Essential Economics (on behalf of Diamond Valley Development Pty Ltd).
6.3.2 Consideration of the Economic Evidence
The economic development objectives documented in clause 21.05-4 of the MSS seek:-
To promote Eltham Town Centre and Diamond Creek as the main commercial and community activity areas in the Shire, and support the viability and vitality of these areas.
In supporting this objective the strategies listed under clause 21.05-4 include a rider concerning development in the DCRBA. Namely, one strategy listed thereunder is to:-
Ensure use and development in the Diamond Creek Road Business Area (Corner Diamond Creek Road and McLaughlans Lane) does not detract from the retail role and function of Diamond Creek township.
In referring to this clause the Explanatory Report to Amendment C22 states that:-
The rezoning of land from B1Z to R1Z will ensure that the commercial development permitted on the DCRBA will be complementary to rather than competing with existing centres in the area.
The Panel recognises that one of the outcomes in rezoning the subject land to the Residential 1 zone would be to prohibit use of the land for 'shop' (other than a convenience shop with a leasable floorspace not greater than 80m2). Council has clearly adopted a position that the discretion for such use, which is currently afforded by the Business 1 zone, should be removed in order to support the abovementioned policy objectives set down in clause 21.05-4 of the MSS.
The Panel recognises that examination of the economic evidence pertaining to the proposed development of a Coles supermarket and specialty shops on part of the subject
32 Report of Panel Amendment C22 To The Nillumbik Planning Scheme August 2003 land, and the additional economic evidence pertaining to the possible retail development of a greater area of the subject land, may assist in determining the strategic justification, or absence thereof, for removing the discretion for shop use currently afforded by the existing Business 1 zone.
The Panel accepts the relevance of the forecast economic impacts arising from the establishment of the Coles supermarket and specialty shops as being illustrative of the potential impacts arising from retail uses allowed by the current Business 1 zone.
The Panel is also cognisant, however, that there is scope for the subject land to accommodate a lesser scale of retail activity or a different form of retail activity than that addressed by the economic evidence. In this respect the Panel acknowledges Mr Finanzio's comment that:-
it is not enough to say that because they (ie: the Council) think supermarkets should not go here that the land is inappropriate for all forms of retail activity and should therefore be residential land.
The Panel is mindful that the DCRBA site covers a total area of approximately 6.93 hectares and comprises land parcels to the east and west of McLaughlans Lane which are held by different owners. In this context, the Panel is required to consider whether the economic evidence necessarily justifies or warrants a rezoning to remove the discretion for shop use from the whole of the subject land (in order to support local planning policy) or whether some part of the subject land could be retained under the Business 1 zone to accommodate a lesser scale or different form of retail activity that would not detract from the retail role and function of Diamond Creek (and remain consistent with the other policy objectives of the MSS).
As a corollary to these deliberations, consideration of the economic evidence is also relevant in determining whether the amendment is necessary to support the policies in Melbourne 2030 which seek to ensure that Activity Centres 'remain viable and vibrant'. In this regard, Eltham and Diamond Creek have been identified in Melbourne 2030 as Major Activity Centres, whilst Greensborough in the neighbouring City of Banyule has been identified as a Principal Activity Centre. Melbourne 2030 indicates that assessment criteria will be developed for out-of-centre development proposals. Among the outcomes sought by the application of these criteria is the:-
avoidance of unreasonable impacts on the economic viability or social and cultural vitality of existing or proposed centres in the network.
6.3.3 Panel Directions on Economic Evidence
At the Directions Hearing the Panel indicated that it would be assisted if the economic impact assessments prepared by the respective economic experts took account of the following matters:- • The cumulative impact on existing centres arising from the planned or potential development of additional retail floorspace elsewhere within the catchment, in addition to the projected impact on existing centres arising from the potential additional retail floorspace on the subject land.
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• The potential economic impact on existing centres if the whole of the Amendment area was eventually developed for retail use for business purposes. • The effect of economic circumstances and trading characteristics of the affected centres, rather than merely assuming that a predetermined level of diversion of income from an existing centre is acceptable.
These directions were confirmed in writing.
The second of these directions is more pertinent to the consideration of Amendment C22 which was heard in conjunction with the permit application.
6.3.4 Expert Witness Conference
In accordance with the Panel's direction, an expert witness conference was held on 13th May, 2003 with Messrs Laura Thomas (of JHD Advisors), John Henshall (of Essential Economics), Roger Gibbins and Chris Bates (of SGS Economics) and Jeff Wolinski (of Ratio Consultants) attending.
The purpose of the meeting, as stipulated by the Panel's direction, was to "develop a statement of matters on which there is agreement and matters that are disputed." The Committee also considered that the economic witness conference would provide an opportunity for SGS to clarify, for the benefit of the other economic consultants, the workings of the Retail Simulation Model employed in the Nillumbik Activity Centres Review (which had been criticised by various parties at the Directions Hearing for failing to provide sufficient information to determine how the figures presented therein were derived). The Committee's verbal instruction at the Directions Hearing was that the economic evidence should provide a clear 'audit trail' to show how the figures were derived.
However, the level of understanding that the Panel expected to emerge from the Expert Witness Conference with respect to the workings of the SGS Retail Simulation Model did not eventuate. Mr Shimmin of JHD advised the Committee by letter dated 9th May 2003 that:- it would not appear possible for the expert witnesses in relation to economic matters to reach agreement on critical issues.
Mr Shimmin indicated that SGS had not afforded the other economic experts an opportunity to undertake a peer review of the Retail Simulation Model. Specifically, Mr Shimmin wrote that:-
we have been advised that this level of scrutiny is not possible and that it is SGS's intention to make information available in the final exchange of evidence before the Panel in an aggregated form.... (we) wish to advise the Panel and Advisory Committee that your objectives for the expert witness conference process are unlikely to be achieved in this instance.
Whilst the Expert Witness Conference did not achieve all of the desired outcomes, the Panel decided not to issue any further directions to the economic experts. Instead, the Panel took the view that the onus was on SGS to provide sufficient explanation at the Hearing for the Committee to understand the workings of the Retail Simulation Model.
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Any failure by SGS to do so would weaken their own evidence rather than being prejudicial to the other parties.
The Panel is satisfied that all parties at the Hearing were afforded such opportunity as they saw fit to cross-examine the economic experts on their evidence.
6.3.5 Economic Models
The economic impact assessments undertaken by JHD Advisors, Essential Economics and Ratio Consultants were each based on the conventional Trade Area analysis methodology. In contrast, the economic impact assessment prepared by SGS Economics (as presented in the Nillumbik Activity Centres Review and submitted in written evidence to the Panel) is based on a gravitation model recently developed by the practice in-house. The C10 Panel was the first Panel at which the SGS 'Retail Simulation Model' had been presented.
The SGS Retail Simulation Model has not been in existence long enough to test its impact forecasts against subsequent actual impacts. Nor has SGS applied their model to historical cases to test whether it produces results true to the economic position evident today. However, the Panel is also mindful that, whilst economic impact assessments based on the Trade Area model are often presented to Panels and VCAT, there has been little, if any, work undertaken by retail economists to validate this model by comparing forecast impacts against those impacts which subsequently actually occur.
The Panel recognises that many of the inputs into the respective economic models are based on the exercise of professional judgement or the adoption of certain assumptions. The accuracy of the forecasts is dependent on the quality of the inputs. However, even with the exercise of the best professional judgment and the best available data, unforeseen circumstances may also arise to produce a different result to the economic forecasts.
In recognising the possible vagaries of the economic analyses, the Panel does not accord the status of scientific certainty to the results of the economic impact assessments forecast by the respective economic experts. At best, the economic impact assessments collectively provide a range of forecast impacts which the Committee can tentatively take into account. Of course, the economic evidence must also be considered in conjunction with the other planning issues identified elsewhere in this report.
6.3.6 Economic Parameters
The key components of the economic impact assessments which the Panel has addressed in this report are as follows:- • Population forecasts • Retail spending forecasts • The forecast turnover of the proposed DCRBA supermarket • The turnover of the proposed DCRBA supermarket/centre captured from beyond the Trade Area • The turnover of the proposed DCRBA supermarket/centre captured from escape expenditure • The estimated turnover of existing centres
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• The estimated turnover of existing supermarkets
The Panel's examination of these economic parameters is presented in sections 6.3.6.1 to 6.3.6.7.
6.3.6.1 Population Forecasts
Each of the economic experts has estimated the population within their respective Trade or Study Area. Population growth rates have also been estimated to provide population forecasts to 2011. These population figures provide the basis for estimating total retail spending in the defined Trade or Study area.
As JHD and Essential Economics have defined similar Trade Areas their respective population estimates can be directly compared (as presented in Table 1 below).
Table 1: Comparison of Population Estimates
Population of Main Trade Area 2001 2006 2011
JHD 41,770 43,320 44,470 Essential Economics 41,730 43,810 45,260
In reference to the information presented in Table 1, the Panel obtains some comfort in the fact that JHD and Essential Economics have independently derived similar population estimates for their comparable trade areas.
SGS and Ratio Consultants have defined study and trade areas which are not comparable to those defined by JHD and Essential Economics or to each other. Accordingly, whilst the Committee does not dispute the population estimates derived by Ratio Consultants and SGS for their respective Trade and Study area, they cannot be referenced to the estimates derived by JHD and Essential Economics.
An obvious reason for planning for the provision of new retail floorspace is to accommodate increased demand resulting from population growth. However, when compared to the population growth experienced in Melbourne's growth corridors, all of the economic experts agreed that the forecast population growth in the catchment surrounding the subject land is relatively low. For example, JHD has forecast a population increase of just 2,700 residents over a 10 year period in their Main Trade Area. This is based on an average annual population growth rate of 0.7% from 2001 to 2006, and 0.5% in the period 2006 to 2011.
Most of the population growth in the catchment will occur in the area north of the subject land and north of Diamond Creek. The population growth in the area surrounding the subject land lies within the 'primary trade area' for the proposed DCRBA development defined by both JHD and Essential Economics.
Population growth will therefore result in a modest increase in retail spending in the Greensborough/Diamond Creek catchment over the forecast period. On JHD's figures,
36 Report of Panel Amendment C22 To The Nillumbik Planning Scheme August 2003 the forecast population growth in their main trade area will, by 2011, generate additional spending on food (in real terms) of around $12.3M per annum (based on current estimated per capita spending on food - ie : 2700 persons X $4,575 per person).
Mr Pitt submitted that the implementation of Melbourne 2030 may result in higher density housing being established around the existing Activity Centres in the catchment and as a consequence result in both higher population and retail spending than forecast by the economic experts. In this respect the Panel acknowledges that the population and retail spending forecasts derived by the economic experts are based on current housing patterns.
6.3.6.2 Retail Spending Forecasts
Each of the economic experts produced forecasts for the retail spending generated by residents in their respective Trade or Study Area. These forecasts provide the basis for estimating the expenditure captured by existing centres and the level of escape expenditure.
With respect to these forecasts the expert witness statement from the economic experts conference on May 13th, 2003 identified that:-
JHD, SGS and EE generally agree that current total average per capita retail spending levels are not significant points of difference, but there is a significant difference in the level of retail spending on food between JHD, Ratio, EE and SGS.
These differences are illustrated in Table 2 below which shows the estimates derived by JHD and Essential Economics for per capita retail spending in 2003 generated by residents of their respective main trade areas.
Table 2: Estimates of Per Capita Retail Spending (2003)
Food Non-Food Total Retail Main Trade Area $ per capita $ per capita $ per capita
JHD 4,575 3,601 8,176 Essential Economics 4,035 3,455 7,490
The difference between JHD and Essential Economics in their estimates for per capita spending on food is 13%. The reasons for such a difference are unclear to the Panel given that both JHD and Essential Economics source retail spending information from MarketInfo and have defined similar trade areas.
The expert witness statement also identified that:-
There are differences in real growth in per capita retail spending between all consultants which are a point of disagreement.
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The growth rates in per capita spending forecast by JHD, Essential Economics and SGS Economics are summarised below:-
JHD Advisors - annual real growth in retail spending per capita to average 1.4% for 2004, 1.9% per annum between 2005-2007 and 1.6% per annum over the period 2008-2012 (Of the economists presenting retail evidence to the Committee, JHD forecast the highest growth rates in spending).
Essential Economics - real growth in per capita spending of 2% between 2003 to 2011.
SGS Economics - real growth in per capita 'supermarket' spending of just under 1.2% per annum between 2003 to 2011 (Based on an increase in real terms from $2,749 in 2003 to $2,975 in 2010/11).
(During the Hearing, Mr. Bates of SGS drew the Committee's attention to an error in his economic analysis which had first been identified in the written evidence of Mr. Henshall from Essential Economics. In forecasting retail expenditure SGS had sourced ABS data which excluded persons under the age of 15, thereby resulting in the figures for retail spending being understated).
The Panel appreciates that the forecast growth rates presented by the abovementioned economic experts were derived on the basis of professional judgement, albeit having regard to historical trends. JHD supported their forecasts by reference to historical average rates of growth in per capita retail spending in Victoria for the period 1993-2002 (based on ABS data). JHD presented the following per capita growth rates based on their interpretation of the ABS data for the stated period:
Food 1.7% pa Non-Food 4.9% pa Total 3.2% pa
In contrast, Ratio Consultants submitted that there had been no real growth in per capita retail sales of food commodities in Victoria in the triennial period 1998/99 to 2001/02. It was submitted that, on the contrary, "a real loss in per capita sales was observed." Based on this assessment, the economic analysis prepared by Ratio Consultants forecast no real growth in household expenditure over and above that indicated by household growth (which Ratio submitted as being less than 1% per annum).
To have economic experts draw different conclusions from an analysis of historical data is regarded by the Panel as being a significant point of difference.
The abovementioned differences between the economic experts flow through to the economic impact assessments. This partially accounts for the different impacts on existing centres which each economic expert has forecast will result from the proposed development in the DCRBA.
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6.3.6.3 Turnover of Proposed Supermarket
The estimated turnover of the proposed DCRBA supermarket and centre forecast by each of the economic experts is presented in Table 3 below. Turnover figures are shown for 2005/2006 which is the first full year in which the proposed centre could be operational.
Table 3: Forecast Turnover of Proposed DCRBA Coles Supermarket & Centre (Expressed in $2003)
Supermarket Supermarket & Turnover Specialty Shops JHD Advisors $22.0M $27.5M Ratio Consultants $27.6M $34.2M SGS Economics $28.7M $35.1M Essential Economics $28.7M $34.9M
Essential Economics, SGS Economics and Ratio Consultants have forecast the same or similar turnover for the proposed supermarket. However, the turnover forecast by JHD is significantly less than that forecast by the other economic experts.
At the Hearing Mr Shimmin revised the JHD forecast upwards by $2M on the basis that the original forecast submitted in written evidence did not make provision for the liquor outlet that will be associated with the store. The turnover of the proposed DCRBA supermarket forecast by JHD is therefore revised to $24M (in 2006, measured at $2003). This equates to approximately $6,683 per m2 of floorspace (for a store with 3,591m2 of floorspace).
Mr Shimmin tendered advice to the Committee that the average turnover for supermarkets is approximately $7,410 per m2 of floorspace. For supermarkets located in conjunction with a discount department store the average turnover is higher at $8,040 per m2 of floorspace.
Both Mr Shimmin and Dr Wolinski indicated that Safeway stores generate higher turnover levels than Coles stores. Based on information sourced from the JHD Retail Averages, the average turnover for a Coles supermarket is $28.1M ($7,484 per m2 of floorspace).
Dr Wolinski, who had access to (and permission to divulge) the actual turnover of the Safeway supermarket at St Helena provided the Committee with the store's turnover figures for the years 1997 to 2002 inclusive. Dr Wolinski submitted that the turnover of the store in 2002 was $43.6M. Mr Shimmin, who also indicated that he had access to actual turnover figures for the St Helena Safeway store, suggested that the turnover figures quoted by Dr Wolinski excluded liquor sales. According to Mr Shimmin the turnover of this store in 2002, including liquor sales, was $44.2M. This equates to approximately $11,946 per m2 of floorspace (based on a floorspace of 3,700 m2).
Based on these figures, JHD has therefore forecast that, in the first full year of trading, the Coles supermarket in the DCRBA will generate a turnover which is $20M less than the Safeway supermarket at St Helena Marketplace, located 1.5km to the south east; $4.1M
39 Report of Panel Amendment C22 To The Nillumbik Planning Scheme August 2003 less than the average turnover for Coles supermarkets; and 10% less than the average trading level for all supermarkets (based on turnover generated per m2 of floorspace).
Under cross examination Mr Wyman questioned Mr Shimmin as to whether a Coles store would be viable at these turnover levels. Mr Shimmin responded that the proposed store would be viable and that Coles were investing in the establishment of stores where turnover forecasts were in the range of $17M-$18M.
In response to a query from the Panel, Ms Nolan, Investment Manager for the Industry Superannuation Property Trust (which owns 23 shopping centres, including St Helena Marketplace) indicated that the majority of Coles stores in the ISPT shopping centre portfolio (approximately 75% of which have Coles as the major supermarket tenant) would generate a turnover in excess of $30M (for full line supermarkets with approximately 3,200m2 of floorspace).
In defence of his turnover forecast for the DCRBA supermarket, Mr Shimmin submitted that 30% of supermarkets with a floorspace of at least 3,000m2 generated a turnover of less than $25M.
The Panel appreciates that Mr Shimmin has estimated the turnover of the proposed Coles supermarket based on an assessment of the existing retail network and the location of the DCRBA site relative to the distribution of population in the area.
The Panel acknowledges Mr Shimmin's experience in preparing forecasts for the major supermarket chains and is not in a position to dispute his estimated turnover figure for a Coles store in the DCRBA. However, the Committee is cognisant that, by reference to average levels of trading performance, there appears to be scope for the DCRBA supermarket to generate higher turnover figures than forecast by JHD. Certainly the other economic experts expect it to achieve a higher turnover. The Panel also recognises that if this store achieves (by JHD's reckoning) better-than-expected trading results, the impact on other centres in the local catchment would presumably also be higher than the impacts forecast by JHD (assuming that the higher turnover is not derived entirely from the capture of escape expenditure or higher than forecast per capita spending on food and groceries).
6.3.6.4 Turnover Captured from Beyond the Trade Area
JHD has forecast that the DCRBA Coles supermarket will capture $8.6M in turnover (ie: 39% of the total store turnover of $22M)4 from centres beyond the main trade area5 (as defined by JHD).
4 JHD forecast turnover for proposed DCRBA Coles supermarket excluding liquor sales.
5 JHD's estimate of turnover from 'beyond the trade area' includes (contrary to the description) spending in retail premises within the Trade Area that is not accounted for in the centres listed in JHD's economic analysis - such as spending on food at take-away food premises or convenience stores at petrol stations.
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The Panel is cognisant that if the Coles supermarket draws a greater proportion of its turnover from a more localised area (ie : from shoppers who would otherwise shop at centres within the trade area rather than centres outside the trade area) the impact on the local centres (such as Diamond Creek) may be greater than that forecast in JHD's economic impact assessment (see section 6.3.7).
6.3.6.5 Turnover Captured from Escape Expenditure
The Panel recognises that the level of impact on existing centres arising from the establishment of a new supermarket-based centre in the DCRBA may somewhat depend on the extent to which the new centre captures existing escape expenditure, in lieu of capturing expenditure currently spent in those existing centres.
By way of example, Essential Economics has forecast that approximately 25% of the turnover of the proposed Coles centre would be captured from existing escape expenditure (representing $8.7M from estimated total centre sales in 2006 of $34.9M).
The Panel is also cognisant, however, that if the proposed supermarket-based centre in the DCRBA captures a higher level of income from within the trade area than that forecast, whilst achieving the same turnover, (ie: the capture of escape expenditure is not such a significant component of the new centre's turnover) then the impact on existing centres may also be higher than that forecast in the economic impact assessments.
6.3.6.6 Turnover of Existing Centres
Each of the economic experts prepared estimates of the current and forecast turnover of shopping centres in the Diamond Creek/Greensborough catchment. These estimates, which are presented in Table 4 below, show the forecast growth in turnover generated by each centre if the proposed DCRBA supermarket is not built. Turnover estimates are shown for 2003 and 2006. This information provides the basis for subsequently determining the level of impact on these centres if the proposed DCRBA development proceeds (see section 6.3.7.1). All figures are expressed in 2003 dollars.
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Table 4: Estimated and Forecast Turnover of Existing Shopping Centres ($2003)
Estimated Shopping Centre Turnover (2006 Estimates If Proposed DCRBA Centre Not Built) Shopping Centre JHD Essential SGS Economics Ratio Consultants Economics $2003) $2003) $2003) $2006) $Increase $2003) $2006) $Increase $2006) $Increase $2006) $Increase Apollo Parkways 5.8M) 4.2M) 3.33M) 3.66M) 6.4M) 0.6M 4.4M) 0.2M 3.23M)- 0.1M 3.70M) 0.04M Diamond Creek 58.7M) 55.3M) 58.63M) 55.26M) 62.9M) 4.2M 59.4M) 4.1M 61.44M) 2.81M 57.79M) 2.53M St Helena 50.1M) 45.4M) 47.98M) 55.00M) 53.3M) 3.2M 48.5M) 3.1M 51.97M) 3.99M 56.29M) 1.29M Eltham 85.2M) 99.85M) 112.46M) Not Provided 90.3M) 5.1M 100.94M) 1.09M 115.19M) 2.73M Greensborough 325.8M) 350.1M) 386.55M) 370.63M) (Plaza and Town 352.7M) 26.9M 371.2M) 21.1M 381.35M) -5.2M 378.41M) 7.78M Centre)
Note:
The 2006 figures represent the forecast turnover of the subject centres without the proposed DCRBA Coles supermarket and specialty shops.
The JHD figures for Diamond Creek are an aggregation of the separate amounts presented in JHD's submission for Diamond Creek Chute Street, Main Road North and Main Road South.
On 3rd June, 2003 (the day prior to the commencement of the Hearing) the Panel received written advice from Minter Ellison, Lawyers, acting on behalf of Newland Investments Pty Ltd (the owners of the Apollo Parkways Shopping Centre) stating that:-
Apollo Parkways is to be closed and the anchor tenancy will cease to trade no later than 30th May, 2004 and without that tenant the Centre will cease to function as a retail centre.
The timing of this advice did not afford the economic experts an opportunity to revise their economic impact assessments.
The turnover generated by Apollo Parkways will, following its closure, be dispersed to other centres in the catchment. The economic experts generally agreed that St Helena Marketplace would be the major beneficiary. However, in the event that the proposed DCRBA supermarket is approved, it would be expected to capture most of the turnover that is currently generated by Apollo Parkways.
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The following observations are made in relation to the turnover estimates and forecasts presented in Table 4:-
• The economic experts have produced similar estimates for the turnover of Diamond Creek in 2003. This provides the Committee with some comfort as Diamond Creek is, by virtue of the policy directions in the MSS, at the forefront of the Committee's considerations.
• JHD has forecast that Apollo Parkways would, despite its acknowledged trading difficulties, generate a 10% increase in real turnover between 2003 and 2006 (if it remains operating), albeit from a low turnover base. This compares to a nominal decrease in turnover (in real terms) forecast by SGS Economics.
• There is a significant variance between JHD's estimate of the 2003 turnover for Greensborough and that estimated by both SGS Economics and Ratio Consultants. The SGS estimate for the turnover of Greensborough is approximately $60M (or 19%) higher than JHD's estimate.
• Whereas JHD and Essential Economics have forecast that Greensborough would (in real terms) increase its turnover by $26.9M and $21.1M respectively between 2003 and 2006, SGS Economics has forecast that the turnover of Greensborough would fall by $5.2M over the corresponding period. This reduction is identified in the SGS spreadsheets as being attributable to a reduced sales turnover from clothes, furniture and appliances. SGS tendered no reasons to the Committee to explain why they were forecasting that Greensborough would, in the absence of the proposed DCRBA development, sustain a loss of income over this period.
These variances demonstrate that economic estimation and forecasting is not a precise science. The results produced by the economic experts are largely the product of inputs which rely heavily on professional judgement (albeit having regard to historical trends, the performance of similar centres etc).
6.3.6.7 Turnover of Existing Supermarkets
JHD Advisors, SGS Economics and Ratio Consultants also prepared estimates of the current and forecast turnover of existing supermarkets in the Diamond Creek/Greensborough catchment. These estimates, which are presented in Table 5 below, show the forecast growth in turnover generated by each supermarket if the DCRBA Coles store is not built. Turnover estimates are shown for 2003 and 2006. This information provides the basis for subsequently determining the level of impact on these supermarkets if the proposed DCRBA development proceeds (see section 6.3.7.2). All figures are expressed in 2003 dollars. (Note that Essential Economics did not prepare turnover estimates for the existing supermarkets).
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Table 5: Estimated and Forecast Turnover of Existing Supermarkets ($2003)
Estimated Supermarket Turnover (2006 Estimates if DCRBA Supermarket Not Built) Shopping Centre JHD SGS Economics Ratio Consultants
$2003) $2003) $2003) $2006) $Increase $2006) $Increase $2006) $Increase Apollo Parkways 3.4M) 2.54M) 2.82M) 3.7M) 0.3M 2.49M) -0.05M 2.84M) 0.021M Diamond Creek 33.3M) 30.95M) 30.82M) 35.2M) 1.9M 32.85M) 1.9M 32.807M) 1.987M St Helena 44.2M) 42.71M) 43.00M) 46.7M) 2.5M 46.37M) 3.66M 44.021M) 1.021M Eltham 55.44M) 68.59M) Not Provided 57.36M) 1.92M 70.338M) 1.748M Greensborough 89.0M) 71.66M) 65.9M) (Plaza and Town 94.0M) 5.0M 73.74M) 2.08M 66.869M) 0.969M Centre)
Note:
The 2006 figures represent the forecast turnover of the subject supermarkets without the proposed DCRBA Coles supermarket and specialty shops.
Given the pending closure of Apollo Parkways, the turnover figures presented for this supermarket merely provide an indication of the turnover that will, following its closure, be dispersed to other centres.
The following observations are made in relation to the turnover estimates and forecasts presented in Table 5:- • The 2003 turnover estimates for the St Helena supermarket are comparable to the known 2002 turnover figure. • The economic experts have produced similar estimates for the turnover of the Diamond Creek supermarkets in 2003. JHD and SGS Economics have also forecast the same increase in turnover for the Diamond Creek supermarkets between 2003 and 2006 ($1.9M), whilst the corresponding figure for Ratio Consultants is also very similar ($1.987M). The turnover of the Diamond Creek supermarkets is therefore a matter of general agreement between the economic experts. • On JHD's 2003 turnover figure (which is similar to that of the other economic experts) the Safeway supermarket at St Helena is generating a turnover of $12,628 per m2 of floorspace (based on $44.2M of turnover generated from 3,500 m2 of floorspace) which is significantly above the average retail turnover density for supermarkets of $7410 per m2.
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There was general agreement among the economic experts that the St Helena Safeway supermarket was trading strongly. The Panel acknowledges that higher than average trading levels may provide scope for new retail entrants to capture turnover from existing centres without undermining the viability of those existing centres. • There is a significant variance between the economic experts in the estimated 2003 and forecast 2006 turnover of the Greensborough supermarkets. JHD has estimated that the Greensborough supermarkets have a turnover which is approximately $23M (35%) higher than that estimated by Ratio Consultants. This is recognised by the Panel as a significant point of difference. Mr Shimmin suggested that he may have access to more accurate information on the turnover of the Greensborough supermarkets than the other economic experts. Whilst acknowledging that this may be the case, given Mr Shimmin's professional association with the major supermarket chains, the Committee is not in a position to verify this statement.
6.3.7 Economic Impact Assessment
6.3.7.1 Impact on Centres
The economic impacts on existing centres resulting from the establishment of the DCRBA centre, as forecast by the respective economic experts, are summarised in Table 6 below. The impacts are shown for the 2006 year - which is the first full year in which the proposed DCRBA supermarket could be operational. Table 6 shows the reduction in turnover borne by the listed centres relative to the turnover which they are otherwise forecast to generate in 2006. All amounts are expressed in 2003 dollars.
Table 6: Economic Impact Assessment - Shopping Centres ($2003)
Shopping Centre JHD Advisors Essential SGS Economics Ratio Consultants Economics $%$%$%$% Apollo Parkways -0.6M -8.7% -0.4M -9.2% -2.52M -85.3% -0.457M -12.3% Diamond Creek -3.7M -5.9% -5.2M -8.7% -2.84M -4.6% -5.775M -10.0% Township St Helena Marketplace -3.4M -6.3% -4.5M -9.2% -6.05M -11.64% -6.242M -11.1% Eltham Township Not Provided -2.8M -3.1% -2.45M -2.43% -4.268M -3.7% Greensborough (Plaza -4.8M -1.4% -12.1M -3.2% -10.78M -2.83% -13.661M -3.6% and Town Centre)
Note:
The JHD impact figures and percentages for Diamond Creek are an aggregation of the separate impacts presented in JHD's submission for Diamond Creek Chute Street, Main Road North and Main Road South
The JHD impacts have not been adjusted to reflect the revised turnover estimate of the DCRBA supermarket (from $22 to $24M) attributable to liquor sales (see earlier comments).
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The following observations are made in relation to the information presented in Table 6:- • JHD has forecast a significantly lower impact on Greensborough than the other economic experts. • The generally lesser impacts forecast by JHD are partially a product of the lower turnover which JHD has forecast for the DCRBA centre relative to the other economic experts (see 6.3.6.3). JHD's estimate that the DCRBA supermarket will capture 39% of its turnover from beyond the trade area (refer section 6.3.6.4) is also a significant contributing factor in the lesser impacts on existing trade area centres forecast by JHD. • Interestingly, SGS has forecast the lowest impact on Diamond Creek - even lower than JHD despite SGS forecasting that the turnover of the DCRBA centre would be $7.6M higher than that forecast by JHD. This result is partially attributable to SGS forecasting that the proposed DCRBA centre will have a significantly greater impact on Apollo Parkways than that forecast by JHD (or any of the other economic experts). • All of the economic experts have forecast that, based on the percentage impacts, Apollo Parkways would sustain the greatest impact from the proposed DCRBA centre, followed in order of impact by St Helena Marketplace and Diamond Creek. • There is a significant variance between the economic experts regarding the forecast impact on Diamond Creek, ranging from -4.6% (-$2.84M) to -10% (-$5.775M).
The Panel's consideration of these economic impacts is presented in sections 6.3.7.3 to 6.3.7.5.
6.3.7.2 Impact on Supermarkets
The economic impacts on the supermarkets in the Diamond Creek/Greensborough catchment resulting from the establishment of the proposed Coles DCRBA supermarket, as forecast by SGS Economics and Ratio Consultants, are summarised in Table 7 below. The impacts are shown for the 2006 year - which is the first full year in which the proposed DCRBA supermarket could be operational. Table 7 shows the reduction in turnover borne by the supermarkets in the listed centres relative to the turnover which those supermarkets are otherwise forecast to generate in 2006. All amounts are expressed in 2003 dollars.
Essential Economics did not provide a separate breakdown of the economic impact on supermarkets in existing centres.
Table 7: Economic Impact Assessment - Supermarkets ($2003)
Shopping Centre SGS Economics Ratio Consultants JHD $%$%$% Apollo Parkways -2.126M -85.3% -0.38M -13.4% -0.7M -19.1% Diamond Creek Township -2.619M -7.97% -4.591M -14.0% -5.0M -14.1% St Helena Marketplace -5.924M -12.78% -5.565M -12.6% -6.1M -13.1% Eltham Township -2.478M -4.32% -3.70M -5.3% Not Provided Greensborough (Plaza and Town Centre) -7.615M -10.33% -10.254M -15.3% -4.8M 5.2%
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The following observations are made in relation to the information presented in Table 7:- • The Panel could not reconcile the percentage and dollar impacts calculated by JHD against their forecast pre and post development turnover for each supermarket. Therefore, whilst acknowledging that JHD's forecast supermarket impacts are similar to those forecast by Ratio Consultants, the Committee has some reservations about JHD's figures. • The economic impact assessment prepared by SGS, prior to receiving advice of Apollo Parkways pending closure, forecast that the Apollo Parkways supermarket would suffer a dramatic (and invariably terminal) 85% loss of turnover to the new Coles supermarket in the DCRBA (with turnover falling from a forecast of $2,491,879 in 2006, without the proposed Coles store, to an estimated $365,666 in 2006 if the Coles supermarket is developed). This is a substantially greater impact than that forecast by any of the other economic experts [as determined by reference to the impact forecast by Ratio Consultants in Table 7 above and by the other economic experts (in relation to the impact on the Apollo Parkways centre as a whole) in Table 6]. • SGS Economics and Ratio Consultants have forecast a similar impact on the Safeway supermarket at St Helena Marketplace. • Despite estimating a similar turnover for the Diamond Creek supermarkets in 2003 and 2006 (pre-development) (see Table 5) SGS Economics and Ratio Consultants have forecast substantially different impacts on these supermarkets if the DCRBA supermarket proceeds. • The Panel appreciates that, even after accounting for the development of the proposed DCRBA Coles supermarket, the economic experts have forecast that the Safeway supermarket at St Helena Marketplace will still generate a turnover in 2006 of between $38.46M to $40.6M. This equates to a turnover density of between $10,988 per m2 of floorspace to $11,600 per m2, which remains above the average trading level for supermarkets.
As previously mentioned, the economic impact assessments undertaken by the economic experts collectively provide the Panel with a range of possible impacts to consider. Beyond identifying any obvious errors or anomalies in these assessments, the Committee is not in a position to determine which of the forecast impacts is likely to prove the most accurate. The Panel's consideration of these impacts is presented in sections6.3.7.3 to 6.3.7.5.
6.3.7.3 Relevance of Comparisons
As previously identified, the economic experts prepared estimates of the turnover of existing centres within the Diamond Creek/Greensborough catchment in 2003 and the forecast turnover of those centres, with and without the proposed DCRBA Coles supermarket and speciality shops, for 2005/6.
Mr Pitt drew attention to the economic analysis undertaken by SGS Economics which revealed that the forecast turnover of the Diamond Creek shopping centre in 2005, with the Coles supermarket and specialty shops trading in the DCRBA, was only $17,906 less than the estimated turnover of the Diamond Creek shopping centre in 2003. Whilst the Panel appreciates that SGS has generally forecast lesser impacts on existing centres than
47 Report of Panel Amendment C22 To The Nillumbik Planning Scheme August 2003 the other economic experts, Mr Pitt's comparison raises, in a broader sense, the question of which comparisons are relevant and how the economic forecasts and impacts presented by the economic experts should be interpreted.
Mr Pitt's comparison identifies practically no change (in real terms) in the estimated and forecast turnover of Diamond Creek between 2003 and 2005 despite the establishment of the Coles supermarket and specialty shops in the DCRBA. In responding to this comparison Mr Gibbins emphasised that this result should be interpreted as indicating that Diamond Creek would 'tread water' for that period. In written evidence Mr Gibbins submitted that:-
M2030 designates Diamond Creek as a Major Activity Centre.....As such it is intended to be a higher order retail centre below the Principal Activity Centre (Greensborough) and above the Neighbourhood Centres.....If it is to fulfil its designated M2030 role it is imperative that it accommodate any and all retail floorspace that is needed in the area. M2030 clearly intends that Diamond Creek shall grow in size, not merely 'tread water' or decline and claw back its position over ten years or so.
The Panel notes that the SGS impact assessment indicates that, if the proposed DCRBA development proceeds, Diamond Creek will generate a modest 1.5% increase in turnover by 2011 relative to its turnover in 2005 if the development did not proceed. As an example of the different results produced by the economic assessments prepared by the respective economic experts, Ratio Consultants forecast that:
the Diamond Creek Activity Centre would still be 5.8% below its 2005/06 levels by 2010/11 if the sales are measured in real terms.
Irrespective of these differences in the economic forecasts, Mr Pitt's earlier comparison raises the question of whether, in analysing the impacts, the forecast turnover of existing centres in future years if the Coles DCRBA development proceeds should be compared against the current estimated turnover of those centres (ie: the 2003 turnover as Mr Pitt has done) or rather compared to the turnover that those centres are forecast to generate in 2005/2006 if the proposed development did not proceed (the year 2005/06 being the first full year that the proposed Coles supermarket and specialty shops could be operational).
In respect to this matter JHD submitted that:-
in our view it is appropriate to express the impact on particular shopping centres or activity centre precincts as a percentage of their potential turnover in the opening year of the proposed expansion, as well as compared with the estimated current trading situation at each centre.
This latter measure is important because it shows the extent to which current conditions can be sustained even after the impact of competitive developments, recognising that in some situations growth in the market from population growth or real spending growth per capita, supply induced demand, and/or a reduction in escape spending, can partially offset the effects of new competition.
Whilst acknowledging the relevance of current turnover estimates for the reasons outlined by JHD, the Panel also recognises that the owners of existing shopping centres, or businesses therein, may have made investment decisions which are based on capturing the additional turnover that may be generated from either population growth, increased per capita spending, or attracting increased shopper patronage from other centres. Certainly Mr Wyman of Deal Corporation (which company developed and owns the Diamond Creek Shopping Station) sought to emphasise this point during the Hearing. This
48 Report of Panel Amendment C22 To The Nillumbik Planning Scheme August 2003 increased turnover may be required to maintain the viability and vitality of a centre or to reach the forecast trading levels which justified the initial investment decision. In these circumstances a comparison of forecast post development turnover against the estimated current turnover of an impacted centre may not be particularly meaningful. One must be careful not to merely presume that a forecast increase in turnover provides a buffer to offset or mitigate the effects of new competition. On the contrary, generating turnover greater than current levels (in real terms) may be critical to the long term sustainability of a centre.
For this reason the Panel is satisfied that, in considering the economic impact assessments prepared by the economic experts, the most relevant comparison to make is between the pre and post development turnovers of affected centres in the impact year (ie: between the forecast turnover of existing centres in the impact year of 2006 if the establishment of the proposed DCRBA development proceeds, and the forecast turnover of those existing centres in 2006 if the DCRBA development does not proceed). This position is consistent with the emphasis attributed to this comparison by the economic experts in presenting their evidence to the Committee.
6.3.7.4 Determination of 'Acceptable' Impact
In hearing economic evidence, Planning Panels and VCAT are routinely presented with the proposition that a 10% diversion of income from an existing centre to a planned competing centre constitutes an 'acceptable impact'.
During the C10 Panel hearing Mr Gibbins submitted that the 10% test had been accorded false legitimacy by being adopted 'parrot fashion' over the years rather than being validated through proper analysis. Mr Gibbins also highlighted the more significant effect on a centre if the viability of anchor uses were threatened.
In reference to the desirability of undertaking an assessment of impacted centres to determine the unique trading characteristics of centres that may be impacted, the C10 Panel stated that "such work would greatly assist in making soundly-based planning decisions." Similar sentiments were expressed in the Panel Report for City of Moorabbin Amendment L16 (the Southland case) wherein the Panel stated:-
The impact index figure of 10% holds no magic. It is relative to centres and uses.
The Panel also takes the point....that if the projected turnover losses for a particular centre approach 10% then it is necessary to look further at the particular centre and examine, its current functioning, potential problems, and susceptibility to decline... (The) Panel suspects such an approach could be far more revealing and add to the body of knowledge relating to the measurement of impacts and the nature of decline or change of retail centres.
In questioning the validity of the '10% test' the C10 Panel stated:-
The Panel recognises that the '10% test' has been accepted as a benchmark for acceptable impacts by previous Planning Panels and Tribunals. However, the Panel does not consider that such a presumption should be applied uncritically...the Panel derives little comfort in the proposition that an impact of 10-15% should be regarded as an 'acceptable impact' In the opinion of the Panel strategic planning decisions should also take into account the unique economic circumstances and trading characteristics of the centres which are impacted...The Panel recognises that commercial
49 Report of Panel Amendment C22 To The Nillumbik Planning Scheme August 2003
circumstances in particular townships may prevail where impacts less than 10% produce a detrimental outcome."
The Panel concurs with these sentiments. The Committee also notes the further criticism levelled at the 10% benchmark by Mr Gibbins in submitting that:-
the retail expenditure being used to justify the Coles proposal has already been counted in submissions in the past....Another example is the analysis submitted to VCAT to justify the Bi-Lo (and related shops) development in Diamond Creek in 2000. Again the intended Coles Trade Area subsumes the catchment...These examples confirm the shortcomings of incremental partial analysis. The floorspace that has been justified in the past on the basis of a quantum of expenditure being available is later denied full access to that expenditure by arguments that if it is reduced by 10% this is reasonable. But there may be more than one 10% 'hit', and yet each is considered to be 'reasonable'. The situation is even worse when it is considered that investment in retail floorspace often precedes the coming on-line of expenditure.
In recognising the inherent deficiencies of the 10% test the Panel issued a written direction to all parties that it would "be assisted if economic impact assessments take account of....the effect of (the) economic circumstances and trading characteristics of the affected centres, rather than merely assuming that a predetermined level of diversion of income from an existing centre is acceptable."
6.3.7.5 Consideration of Impacts
The economic impact assessments prepared by JHD, SGS Economics and Ratio Consultants forecast that a Coles supermarket and specialty shops in the DCRBA will result in approximately $2.6M to $5M in turnover being diverted away from the supermarkets in Diamond Creek to the DCRBA supermarket in its first full year of trading (relative to the turnover that the supermarkets in Diamond Creek are forecast to generate if the DCRBA development does not proceed). Overall, the economic experts forecast that Diamond Creek township will lose between $3.7M to $5.7M in retail sales to the new centre in the year of impact.
The Panel is cognisant that the Diamond Creek supermarkets (particularly the BiLo store) are anchor tenants which draw shoppers to the township. The size of the forecast impacts on the supermarkets in Diamond Creek are not inconsequential. The Committee considers that it would be imprudent to suggest that impacts of the scale forecast by the respective economic experts (particularly in the upper range of forecast impacts) would have no detrimental effect on the supermarkets and, ultimately, on the Diamond Creek township. The Committee acknowledges the clear strategic direction stated in clause 21.05-4 of the MSS to:-
Ensure use and development in the Diamond Creek Road Business Area ...does not detract from the retail role and function of Diamond Creek township. (emphasis added)
Whilst the forecast impacts may perhaps not be of such magnitude to fundamentally change the role and function of Diamond Creek, the Panel is satisfied that they have the potential to nevertheless detract from that role and function. This distinction is important. The Committee is satisfied that the intention of the MSS is not merely to protect Diamond Creek township from impacts which would be 'terminal' or so deleterious to businesses in Diamond Creek that the role and function of the town would be changed (by virtue of a significant reduction in shopper patronage and a resultant closure of businesses) but also
50 Report of Panel Amendment C22 To The Nillumbik Planning Scheme August 2003 seeks to ensure that development in the DCRBA does not erode or diminish the strength and vitality of retail trading in the township which underpins its role and function as one of the main commercial centres (together with Eltham) in the Shire of Nillumbik. This interpretation is consistent with clause 21.05-4 of the MSS which seeks to:-
support the viability and vitality of these areas. (emphasis added)
The Panel is also cognisant that Melbourne 2030 identifies Diamond Creek as a 'major activity centre'. To fulfil this role there is an expectation that the trading environment in Diamond Creek must be elevated to a new level by refurbishing existing stores, improving shopper amenity, undertaking infrastructure works, and possibly broadening (within the constraints of commercial feasibility) the range of retail, commercial and community uses. Any development in the DCRBA which could foreseeably frustrate such initiatives, by virtue of diverting substantial future income away from the township, cannot be regarded lightly. Certainly, the magnitude of the forecast economic impacts on Diamond Creek (particularly with regard to the supermarkets) raises concerns which need to be considered in conjunction with the planning matters addressed elsewhere in this report.
Ratio Consultants commissioned Mary Jane Denton of Main Street Marketing to undertake a survey of traders in Diamond Creek to "assess current levels of trade viability and possible impacts of the proposed retail development at Diamond Creek Road." The survey was conducted in April 2003 with 21 business proprietors participating in face-to- face interviews.
As a separate exercise, Eltham Chamber of Commerce and Industry also commissioned Mary Jane Denton to undertake a survey of traders in Eltham township. This survey was undertaken in May 2003 with 23 businesses participating.
From the survey of Diamond Creek traders, Dr Wolinski reported that:-
for half the traders surveyed, an impact of less than 10% was regarded by them as highly significant. Almost all of the traders surveyed indicated that there would be varying levels of impacts on their business arising from a 10% loss of trade, including impacts on their take-home pay, leisure time, employment, mortgage payments etc...The small sample is not sufficient to draw a statistically valid conclusion, but its consistency provides a sufficient basis to challenge the apparently accepted principal (sic) that a 10% impact or thereabouts on the centre, is not significant. The issue of impacts must be related to the existing viability of centres and the businesses in those centres.
Similar responses were received in the survey of Eltham traders.
Mr Shimmin was critical of the trader surveys and expressed doubt as to whether the size of the sample and the type of questions asked enabled any reasonable conclusions to be drawn from the exercise. In this respect the Panel appreciates that Dr Wolinski has acknowledged that "the sample was not sufficient to draw a statistically valid conclusion." However, the overall conclusion that Ratio Consultants draws from the trader survey in stating that "the issue of impact must be related to the existing viability of centres and the businesses in those centres" is entirely consistent with the views expressed by the C10 Panel (as previously restated) and in respect of which this Committee concurs.
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The Panel does acknowledge that the trader survey was a somewhat superficial exercise and of limited statistical relevance. However, in commissioning the survey Ratio Consultants at least attempted to address the Committee's direction for the economic evidence to consider "the economic circumstances and trading characteristics of the affected centres rather than merely assuming that a predetermined level of diversion of income from an existing centre is acceptable."
In expressing concern about the merits of the trader survey, Mr Shimmin suggested that the existing viability of businesses and their capacity to withstand a loss of turnover to a new competing centre could only be truly established by a thorough financial evaluation conducted by an accountant. Mr Shimmin suggested that the off-the-cuff responses to a face-to-face survey would simply reflect a trader's natural reluctance to condone any development that may draw income from their business.
The Panel is inclined to concur with Mr Shimmin on this point. However, the Committee also considers that the logical extension of Mr Shimmin's argument is that it must be equally questionable for anyone to merely assume that a 10% impact on existing centres (arising from the establishment of a new competing centre) is an 'acceptable impact' in the absence of a proper analysis which provides an understanding of the trading characteristics of the impacted centres, the viability or 'health' of the existing businesses in those centres (particularly of the anchor tenants), the capacity of businesses to sustain a loss of trading income (at whatever level), and the impact that the diversion of income to a new centre may have on the trading environment in the existing centres.
6.3.7.6 Other Development Scenario's
At the Directions Hearing the Panel indicated that it would be assisted if the economic impact assessments prepared by the respective economic experts considered "the potential economic impact on existing centres if the whole of the Amendment area was eventually developed for retail use for business purposes."
The economic impact assessment prepared by JHD only considered the impact on existing centres arising from the proposed Coles supermarket and specialty shops (collectively encompassing a floorspace of approximately 5,000m2) and did not explore any additional development scenario's on the subject land.
In response to the Panel's direction, Mr Henshall of Essential Economics submitted in written evidence that "the most appropriate development of the land would be as a neighbourhood centre of approximately 5,000m2 to 7,000m2". Accordingly, Essential Economics prepared economic impact assessments for two development scenarios - namely, for a 'neighbourhood shopping centre' of 5,000m2 (which is akin to the proposed Coles development) and for a slightly larger centre of 7,000m2 incorporating a second smaller supermarket. These assessments forecast that the impact on Diamond Creek would increase from 8.7% to 11.6% (with lost sales increasing from $5.2M to $6.9M) if the scale of a supermarket-based development on the DCRBA rose from a floorspace of 5,000m2, with one full-line supermarket, to 7,000m2, with the addition of a second smaller supermarket (relative to the pre-development turnover of Diamond Creek in 2006). The corresponding forecast impacts for St Helena Marketplace would increase from 9.2% to 12.3% ($4.5M to $6.0M).
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Ratio Consultants did not prepare a table of impacts for any additional development scenarios on the subject land (beyond the 5,000m2 Coles proposal) but submitted that:-
an additional supermarket development focused on an Aldi store and up to 20 specialty shops would be likely to generate further negative impacts on the existing centre.....amounting to about 30% of the originally assessed trading impacts. For example, the assessed impacts on St Helena (of 11.1% of potential trade in 2005/06...) would likely increase to 14.4% in real terms.
SGS Economics prepared additional economic impact assessments for the development of 10,000m2 of floorspace (incorporating a second full-line supermarket) and 16,000m2 of floorspace on the subject land.
SGS forecast that the development of a second full-line supermarket on the subject land would roughly double the impact on Diamond Creek (from 4.6% to 9.2%) and St Helena (from 11.64% to 21.68%) relative to each centre's pre-development turnover in 2005.
Ratio Consultants tendered advice to the Panel that the development of 16,000m2 of retail floorspace in the DCRBA (as also assessed by SGS) would require a discount department store as an anchor. Neither Ratio Consultants, Essential Economics or JHD considered that the subject land would be the preferred location for a discount department store. Based on this advice the Panel accepts that the SGS impact assessment based on the development of 16,000m2 of retail floorspace in the DCRBA may be beyond the realms of commercial reality.
As expected, the further development of the DCRBA for retail use anchored by a second supermarket would increase the impact on existing centres beyond those identified in respect of the proposed Coles development.
6.3.8 Investment Sentiment
Melbourne 2030 promotes the role of strategic planning in providing:-
clear direction to investors about preferred locations for investment (p.52)
Dr Wolinski advanced the view that the impact of the proposed development on investment sentiment in Diamond Creek and other existing centres was a more important consideration than the issue of retail floorspace provision within the local catchment, which he described at the Hearing as "a complete furphy."
With respect to the economic impact assessments prepared by the respective economic experts Dr Wolinski submitted that:-
the calculation of likely trade impacts is a meaningless statistic in the absence of other considerations (p.26)...The key issue is the consequence of those effects on the future amenity, business and investment conditions in each of the activity centres under assessment, and the extent to which the proposed development is likely to reinforce or detract from State Planning Policy and the recently released Metropolitan Strategy... (p.11)
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Dr Wolinski further submitted that:-
the medium and longer-term effects of the subject development (that is, beyond the first year of operation) will likely lead to a loss of confidence and future investment in the affected centres. This will further increase their long-term vulnerability.
Ms Nolan, Investment Manager for the Industry Superannuation Property Trust (ISPT) submitted that investors would have concerns about investing in a perceived high risk planning environment if the proposed development was to proceed in apparent contradiction to established planning policy.
Mr Shimmin and Mr Henshall expressed a contrary view in suggesting that investment decisions (to increase retail floorspace, improve shopper amenity etc.) were invariably made in response to competition and not in a trading environment closed off from competition.
Whilst acknowledging that competition may act as a catalyst for further investment (and a more sophisticated response to community preferences, needs and demands) in a centre, the Panel recognises that the existing retail network in the vicinity of the subject land is already very competitive, with Diamond Creek, Eltham, St Helena and Greensborough all located within close proximity of each other. On this basis there appears to be sufficient existing competition in the catchment to act as a spur for investment.
The Panel also notes that Dr Wolinski sought to draw a distinction between the capacity of the major institutions, who own the larger centres, to make investment decisions in response to competition, and the lesser capacity of the small developers and family proprietors in smaller centres, such as Diamond Creek, to respond to competition through in-centre investment. On this point the Panel appreciates that the capacity of traders and landowners to respond to increased competition by committing investment funds to refurbish stores, increase the provision of floorspace and improve shopper amenity may vary from centre to centre.
Mr Pitt was dismissive of Dr Wolinski's concerns about the impact of the proposed development on investment sentiment within existing centres. Mr Pitt described this line of argument as "a convenient refuge to adopt" because the extent of any impact could not be forecast in any quantifiable manner. Mr Pitt asserted that such arguments merely sought to prevent competition.
Having heard the opposing arguments on this issue the Panel is satisfied that the impact of the proposed development on investment sentiment in existing centres is a relevant consideration.
Assessing the overall economic impact on an existing centre arising from the proposed development of a competing centre is a more complex and dynamic exercise than merely deriving an estimate of the turnover which may be diverted to the new centre. In this sense the Panel has adopted a broader interpretation of the term 'economic impact' than is associated with the formulaic and narrow exercise of forecasting turnover impacts.
If, having regard to the particular characteristics of a retail network, it can be foreshadowed that the establishment of a new centre will have a deleterious effect on the
54 Report of Panel Amendment C22 To The Nillumbik Planning Scheme August 2003 investment sentiment in an existing centre, then such effect constitutes an 'economic impact' which ought to be considered (albeit that the impact may be incapable of being forecast in a quantifiable manner).
The Panel acknowledges Mr Pitt's concerns about the potential for such arguments to be presented merely as a guise to prevent competition. However, the difficulty of forecasting, in any quantifiable way, how investor sentiment may be affected does not mean that such concerns should be dismissed as being somehow illegitimate. The importance of investor confidence in driving economic activity is well-recognised in the wider economy.
The Panel is satisfied that the magnitude of the economic impacts on Diamond Creek have the potential to weaken investor confidence in the township. The implementation of desired improvements (such as shop refurbishment) which are necessary for Diamond Creek to fulfil its role as a major activity centre under Melbourne 2030 could be frustrated if a negative investment sentiment prevails in the township. Whilst incapable of being quantified, the possible negative impact on investment sentiment in Diamond Creek that may result from the establishment of a Coles supermarket and specialty shops in the DCRBA is an issue which the Panel considers must be addressed in conjunction with its deliberations on the other planning matters relevant to the proposal.
6.3.9 Floorspace Provision
SGS Economics and Ratio Consultants have estimated that the Diamond Creek/Greensborough catchment can support a modest addition to retail floorspace of between 7,500 m2 to 10,230m2 over the period to 2011. These estimates are summarised in Table 8 below.
Table 8: Accommodation of Additional Floorspace within the Catchment
Floorspace Requirements for: SGS Economics Ratio Consultants (m2 of floorspace) (m2 of floorspace) Supermarket & Food Retailing 4,718 4,490 Non-Food Retailing 2,779 5,740 Total Retail Floorspace Requirement 7,497 10,230
Note: The SGS figure of 7,497m2 of floorspace required, as originally presented in written evidence, was subsequently revised to 9,235m2 in view of revised demographic data.
The figures for SGS Economics presented in Table 8 collectively refer to the future floorspace requirements for specific centres in the Shire of Nillumbik - namely, Apollo Parkways, Diamond Creek, Eltham and Hurstbridge. The figures for Ratio Consultants have been derived from an assessment of the floorspace requirements of a broader catchment area which includes Greensborough shopping centre. In referring to these differences Dr Wolinski submitted that:-
It is appreciated that the two sets of analyses encompass somewhat different geographic areas. Nonetheless they arrive at a similar conclusion, namely that only relatively minor amounts of additional retail floorspace is justifiable for the foreseeable future.
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JHD and Essential Economics have submitted that the proposed Coles supermarket and specialty shops (which collectively comprises approximately 5,000m2 of retail floorspace) can be supported in the DCRBA but did not specifically turn their attention to quantifying the overall level of floorspace that could be supported within the catchment.
The additional retail floorspace which SGS Economics and Ratio Consultants have estimated can be supported within the Greensborough/Diamond Creek catchment is based on future and existing floorspace generating or gravitating to average turnover densities. However, whilst acknowledging the argument that consumers may benefit from the provision of additional retail floorspace if it can be supported, the Committee sees no harm in existing centres trading at above-average turnover densities provided those centres can cope with the volume of customers without any substantial detrimental impact on shopper amenity or access. There was no evidence presented to the Panel to suggest that the existing supermarkets or centres would be incapable of accommodating the increased level of shopper patronage associated with the forecast modest increase in population within the catchment.
Whilst the economic experts have identified that additional retail floorspace may, in the future, be capable of being supported within the Diamond Creek/Greensborough catchment (based on average turnover densities) the pertinent question which then arises as an issue of planning policy is whether this floorspace should be directed to existing activity centres (or at least the opportunity reserved for such floorspace to be accommodated in existing activity centres) or allowed to establish in an out-of-centre location such as the DCRBA. In this respect the Panel is mindful that the proposed development in the DCRBA would account for between 50-70% of the total retail floorspace and 85-90% of the floorspace for food retailing that SGS Economics and Ratio Consultants have estimated could be supported in the catchment in the period to 2011 (based on JHD's estimate that the proposed DCRBA development will, between the supermarket and specialty shops, provide 4002m2 of floorspace for food retailing). The issue of where additional retail floorspace should be located is addressed elsewhere in this report.
6.3.10 Conclusions on Economic Evidence
The Panel is of the opinion that the magnitude of the forecast impacts on the supermarkets in Diamond Creek does give rise to a real concern regarding the potential for the proposed DCRBA development to detract from the role and function of the Diamond Creek township.
The Panel is further satisfied that the magnitude of the forecast impacts on Diamond Creek also have the potential to weaken investor confidence in the township. For Diamond Creek to fulfil its role as a Major Activity Centre under Melbourne 2030 will require the refurbishment of existing stores, improving shopper amenity, undertaking infrastructure works, and possibly broadening (within the constraints of commercial feasibility) the range of retail, commercial and community uses in the township. By siphoning future income from the anchor supermarkets and other businesses in Diamond Creek, and possibly weakening investor confidence in the township, the proposed DCRBA development could threaten the achievement of these planning goals.
56 Report of Panel Amendment C22 To The Nillumbik Planning Scheme August 2003
6.4 IS THE DCRBA AN EXISTING OR PLANNED ACTIVITY CENTRE?
Although all parties agreed that new retail floorspace should preferably be located in activity centres, there was no consensus whether the DCRBA should be characterised as a planned activity centre in its embryonic stages or alternatively, as an “out of centre” location.
The Panel does not want to loose sight of the strategic planning directions expressed in policy by engaging in a protracted semantic debate about how the land should be characterised within policy terminology. However, the evaluation of whether the DCRBA is an existing or planned activity centre is a key factor in the assessment of whether the proposals before the Panel support planning policy.
The Amendment explanatory report stated that:
“Melbourne 2030 identifies Activity Centres to be developed as multi purpose centres for business, shopping, working and leisure. In summary, activity centres are to comprise a range of activities and community facilities, to provide for different types of housing and are to be connected by public transport. ……. The Diamond Creek Road Business Area (DCRBA) is not identified as an Activity Centre in Melbourne 2030 and does not meet the above criteria to qualify as an Activity Centre. “
Council’s submission to the Panel stated that:
“…the subject land and the land nearby in Diamond Creek Road is not an activity centre, that is not envisaged as an activity centre and it should not be an activity centre.”
Mr. McNabb stated that:
“Although the planning history is confusing and convoluted, the most prevalent thread underlining the strategic planning approach for the site is to develop it as a cluster of community uses and low intensity commercial uses. The focus of this cluster is to take advantage of the frontage to a busy main road. The extent of separation of uses along Diamond Creek Road in the wider area and the lack of physical, vehicular and pedestrian connections between uses are not consistent with the sense of place or community focus that I would normally associate with an activity centre.”
And “The fact that the DCRBA is described in the MSS separately from the three levels of activity centres in Nillumbik and the site is referred to as a “highway related commercial precinct” rather than a “centre” indicates to me that the local planning view of the DCRBA is as something different from an activity centre.”
He then noted that the Nillumbik Activity Centre Review November 2002 (discussed in 7.3) did not recommend that the DCRBA be designated as a neighbourhood activity centre as it would undermine other activity centres including Apollo Parkways. The review recommended that the DCRBA “be designated the “Diamond Creek Road Commercial and Community Area” and that an urban area Local Convenience Centre be incorporated (definition – single convenience shop restricted to 200 sqm.)”(Pg 33)
The DSE submission adopted a similar approach to the issue of whether the subject land is an existing or planned activity centre to Mr. McNabb and proceeded on the basis that the DCRBA represents an “out of centre” location in terms of Melbourne 2030.
57 Report of Panel Amendment C22 To The Nillumbik Planning Scheme August 2003
Other submittors supporting the Amendment and opposing the application were generally predicated on the basis that the DCRBA is not an existing activity centre and the long term planning for the area has been for community use and low intensity commercial use, not as an activity centre.
Mr. Finanzio argued that the proposition that the DCRBA is an out of centre location is contradicted by the Business 1 zoning of the land. He noted that after Council’s review of activity centres, it has not been proposed to amend the local planning policy framework in relation to the role, function and development of lower order centres. He also suggested that “This existing business zone is next to a school, a church, a plant nursery, a petrol station and another church. Save for any form of retail, this is a centre.” and that the area should be allowed to develop as a neighbourhood centre.
Mr. Govenlock’s evidence did not address whether the DCRBA is an existing or planned activity centre but he considered the site to be suitable for development as a neighbourhood centre (see discussion in section 6.5).
Mr. Pitt argued that the SGS Activity Centre Review had identified corner stores as activity centres, that purely shopping centres such as St. Helena constitute Neighbourhood Activity Centres within the Melbourne 2030 definition, and the LPPF recognises the commercial role of the DCRBA. He stated:
“In summary the Trust Corporation submits that you cannot construe the Business 1 zoning or even the description of the precinct in the Diamond Valley Local Structure Plan and Outline Development Plans for Plenty and Yarrambat Area (1989) as anything other than a Planned Activity Centre for the purposes of clause 17 and other provisions of the planning scheme.”
Mr. McGurn noted that the existing MSS identifies the site as a highway related commercial precinct which he characterised as “an evolving activity centre, albeit an identified highway related commercial precinct.”
The Panel agrees with Mr. McNabb’s assessment that the DCRBA does not currently have the sense of place or community focus that are normally associated with an activity centre. Nor does the precinct have any significant retail functions which, except for a limited number of specialised activity centres, provide a fundamental underpinning component of an activity centre.
Whilst the Panel acknowledges the compelling list of activities identified by Mr Finanzio, it considers that the absence of a retail component, a critical ingredient of an activity centre, greatly reduces his argument.
The Panel notes that the centres acknowledged by all parties as existing activity centres are also referred to as “precincts” rather than “centres” in the MSS and therefore the Committee does not attach any particular significance to this terminology. It is noted that the MSS does draw a distinction between the listed “main commercial activity precincts” and the DCRBA which is described as a “highway related precinct”.
The Panel does not believe that the DCRBA is an established activity centre and will now consider whether the area could be characterised as a planned activity centre.
58 Report of Panel Amendment C22 To The Nillumbik Planning Scheme August 2003
The now dated Diamond Valley Local Structure Plan and Outline Development Plans for Plenty and Yarrambat Area (1989) nominated the township of Plenty as the location for the concentration of convenience shopping and community uses. It also indicated that only small scale shops were appropriate in the DCRBA which was subsequently reflected the zoning of the land Diamond Valley Special Business No.1 Zone which prohibited shops.
The prohibition of such a key element of activity centres and the nomination of Plenty as a neighbourhood centre, make it clear that the DCRBA was not planned to be an activity centre prior to the introduction of the new format planning scheme.
The planning intentions for the DCRBA since June 2000 (when the new format planning was approved) are less clear. The planning scheme applied a Business 1 zone, the zone that applies to the core area of virtually all activity centres, to the DCRBA. The B1Z has a purpose:
“To encourage the intensive development of business centres for retailing and other complementary commercial, entertainment and community uses.”
However, the zone schedule required a permit for any significant retail development. The MSS indicates that firstly, retail development should be concentrated in Eltham and Diamond Creek, secondly that any development should not undermine the role and function of Diamond Creek, and thirdly that the area was intended as a “highway related commercial and community precinct”.
The meaning of the term “highway related commercial and community precinct” has been consistently adopted in the planning framework for the DCRBA but the meaning is not clear.
An officer report to Council at the time post exhibition changes to the new format planning scheme were considered suggested that the proposals for the area were intended to translate the previous zone provisions. The Panel has already referred to the Draft policy, which was not included in the scheme, in an attempt to gain an understanding of the planning intentions for the area at that time. The Draft policy indicated that significant convenience retailing and perhaps further uses such as medical centres, cafes, leisure uses etc, were contemplated for the DCRBA at that time, albeit at a level that would not undermine Diamond Creek.
The Panel accepts that the current planning policy framework and B1Z which apply to the DCRBA, combined with established community uses such as the school, would allow consideration of development that would result in the creation of a new activity centre at the DCRBA.
However, the planning authority is adamant that the DCRBA is not a location that is planned to become an activity centre and they have sought to rezone the land since the applications for significant retailing proposals made the implications of the B1Z apparent. On the recommendation of the C10 Panel, Council also commissioned further work on activity centres and the future of the DCRBA. The Review of Activity centres did not recommend that the DCRBA be developed as an activity centre and proposed a limit of a single convenience shop restricted to 200m2.
59 Report of Panel Amendment C22 To The Nillumbik Planning Scheme August 2003
The Panel acknowledges that it is arguable whether the DCRBA could be characterised as a planned activity centre. It also recognises that it would be possible for the area to develop as an activity centre under the existing planning framework. However, the Panel is not convinced that the Amendment area has been planned to be an activity centre within the meaning of Melbourne 2030 - that is as a community focus that promotes multi- purpose trips. There has not been a clear vision for the site but there has been a recurring theme that the area will develop as a string of highway focussed development of non- residential uses.
Ultimately, the evaluation of any proposal must focus on whether a net community benefit would result. In this case, the ambiguous status of the land in the recent planning history, together with the strengthened policy position to support established activity centres as a result of Melbourne 2030, reinforce the need to carefully evaluate the proposal against that fundamental test.
6.5 SHOULD THE DCRBA DEVELOP AS A NEIGHBOURHOOD ACTIVITY CENTRE?
Melbourne 2030 indicates that:
Redevelopment in middle and outer suburbs and development of new growth areas should provide viable locations for Neighbourhood Activity centres in areas where their current distribution is inadequate.
The Panel will first consider whether there is a need for a Neighbourhood Activity Centre at the DCRBA and then whether the DCRBA is an appropriate location for a neighbourhood Activity Centre.
6.5.1 Is there A Need For A Neighbourhood Activity Centre At the DCRBA?
The Panel recognises the established principle expressed in Shell v City of Frankston and Amoco Ltd. 8 APA 126 at 133 that:
" When the word need is used in a town planning sense, it must mean community need. It is not necessary to show an element of urgent community necessity for a facility. Rather, need connotes the idea that the well being of the community or some part of it can be better and more conveniently served by the provision of a particular facility."
In consideration of the creation of a new neighbourhood centre at the DCRBA, the Committee is satisfied that the existence of 8 full-line and mid-sized supermarkets within 9 minutes driving time of the subject land means that there is not an urgent need for this type of facility to meet community requirements. In the context of a fringe metropolitan location, the existing distribution of supermarket based centres in the vicinity of the DCRBA results in reasonable travel times. It was not submitted that the existing supermarkets are operating at a level beyond capacity which would compromise the service that can be provided to the community.
It is also notable that the proposal for the DCRBA adopts a common format of supermarket based development with supporting specialty shops. This is a mix of
60 Report of Panel Amendment C22 To The Nillumbik Planning Scheme August 2003 retailing that retailers clearly believe serves convenience shopping needs well but it does not represent any significant expansion of the choices available to consumers in this locality.
Mr. Shimmin and Mr. Henshall suggested that the trade area is currently undersupplied with supermarkets which is reflected in low floorspace provision relative to common benchmarks and trading levels of supermarkets in the trade area which are more than 30% above average. Mr. Shimmin estimated that supermarket floorspace for Nillumbik and the main trade area are approximately 50% and 29% below metropolitan averages respectively.
The Panel believes that the conclusion that existing floorspace provision at levels below metropolitan averages justifies further retail floorspace should be viewed with considerable caution, particularly in fringe locations. More concentrated retail networks of established inner and middle suburbs are of questionable relevance to a fringe location where there is a much lower capacity to draw support for floor space from a wider area.
It is a matter of public record that St. Helena is trading well and estimates presented at the hearing suggested that that centre, and perhaps other supermarkets in the trade area, is trading well. This does suggest an increased capacity to remain viable in the context of competition from additional floor space.
Mr. Shimmin put forward the principle that:-
“The residents of an area should be provided with the broadest range of conveniently located retail facilities and services which the market can support, at the earliest possible time without jeopardising the sustainability of other centres in the network which are adequately fulfilling consumer needs.”
The Panel generally supports this proposition in so far as planning should facilitate the broadest range of retail opportunities and other services, convenience and accessibility for the community. The community does not benefit from unjustified limits on the extent and type of retail opportunities, nor by delays in provision.
However, this does not mean that planning policy should not direct retail development to locations where the community will benefit. This issue is explored further in section 6.6. The Panel does not agree with Mr. Govenlock suggestion that planning should not attempt to “pick winners”. The Committee believes that activity centre policy, which has been strengthened by the adoption by the State Government of Melbourne 2030, is predicated on an entirely appropriate concept of identifying locations where the community “wins”.
The Committee has already commented that there may be opportunities for expansion of retail opportunities in established centres which are acknowledged by all parties as the preferred location for further retail development. In the absence of an urgent need for new retail facilities, these opportunities should not be pre-empted by development on a less desirable site such as the DCRBA.
Although not advanced in any significant way by submittors, the Panel comments that perhaps the most reasonable justification for a neighbourhood activity centre at the DCRBA would be to promote ESD principles of walkable neighbourhoods with access to services and facilities.
61 Report of Panel Amendment C22 To The Nillumbik Planning Scheme August 2003
If Apollo Parkways does close, the only retail options in the neighbourhood north of Diamond Creek Road would be the shop associated with the existing service station. Car based shopping trips would be necessitated and access for people who do not have cars to basic requirements would be very limited. Clearly the vast majority of supermarket trips are currently car based, but a strong network of neighbourhood centres may provide a more robust urban form that is capable of responding to future changes in retailing models or the economics of reliance on car based travel.
The maintenance of some retail opportunity to serve local needs, even of a limited scale, has some merit in terms of ESD principles and providing services to those without cars.
6.5.2 Is the DCRBA an Appropriate Location For a Neighbourhood Activity Centre?
Mr. Shimmin’s evidence suggested that:
The preferred location should be based on established criteria for successful business operation. These criteria would include the following :
• The size and orientation of a logical trade area. • The geographic distribution of demand. • The pattern of supply. • Access and exposure. • Adjacencies, with particular reference to existing commercial activities as well as community focal points and regularly visited locations (eg schools).
He then indicated that the geographic distribution of demand favours the site, the location is appropriate for a local convenience centre having regard to the location of and constraints within existing centres, access and exposure are very strong attributes, and adjacencies, particularly the school, are positive attributes.
Despite the evidence presented suggesting that the supermarket is expected to operate at well below industry averages in the short to medium term, the Panel accepts that the site’s main road location provides good access and exposure which, together with the potential trade area, mean that the DCRBA may well result in a commercially successful retail facility.
While criteria for business success are important to the ongoing success of an activity centres, the interests of strategic planning are broader. It is not enough to demonstrate that business would be successful in a particular location. Rather, the evaluation must demonstrate that broader criteria directed at the community interest are served.
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The Panel recognises that the DCRBA could be developed as a Neighbourhood Activity Centre with the key features identified in Melbourne 2030 (page 49) as generally noted below.
Melbourne 20303 Neighbourhood Panel Comment Activity Centre Key Features • A limited mix of uses meeting local DCRBA proposals are directed at convenience needs. convenience needs • Less than 10,000 sqm retail floor Development of the whole of the DCRBA would space result in substantially more floor space but the planning scheme could establish a limit on the scale of a centre via zoning or planning scheme provisions.
• Access to a viable user population by The DCRBA could be designed to establish walking/cycling pedestrian/cycle links to adjoining residential area. The low density of development in the immediate area is a limiting factor.
• Accessibility by local bus services The DCRBA has a bus route passing the site which and public transport links to principal currently offers extremely limited services (a single or major activity centres morning/evening service). The provision of bus services is substantially a response to demand. The limited public transport services to residents of this area necessitate high levels of car dependence for all trips by residents.
• Ideally close to schools, libraries, The established uses in the DCRBA eg school, child child care, health services, police care, medical, churches, would allow the stations and other facilities that development of a cluster of uses. benefit from good public transport.
Broad criteria that Melbourne 2030 indicates should apply to consideration of “out of centre” development proposals are briefly discussed in the table below.
Melbourne 2030 Out-of-centre Panel Comment assessment criteria Avoidance of unreasonable impacts Discussion in 8.3.7 raises concerns regarding the possible on the economic viability or social impact Diamond Creek centre and the supermarket anchor and cultural vitality of existing or uses in particular. This is particularly significant as proposed centres in the network. Melbourne 2030 envisages a broadening of the role of Diamond Creek to a major centre, rather than merely maintaining its existing role. It also notes that the impact on investment sentiment could result in reduced investment necessary to maintain a vital centre.
63 Report of Panel Amendment C22 To The Nillumbik Planning Scheme August 2003
Location on and accessible to the The DCRBA is not well served by public transport. It is Principal Public Transport Network not located on the PPTN and the existing bus service is (PPTN) very limited. It is recognised that neighbourhood centres will not always be well served by public transport, supermarket shopping is largely car based and bus services respond to demand, but the poor level of service means that alternatives to car based trips are not an option and those without cars are disadvantaged.
A comparable proportion of work The DCRBA would be likely to achieve a similar and visitor trips by public transport proportion of public transport trips compared to St. Helena compared to that achieved by similar but fewer trips than higher order centres such as Diamond activity centres. Creek or Greensborough.
A location in an existing cluster of There are established non residential uses in the DCRBA. out of centre developments or Synergies between the school and child care uses and adjacent to such a cluster if the site is convenience shopping could be expected. Design would already used for non-residential contribute to the extent to which the DCRBA would purposes) and improvement to the operate as a community hub. The DCRBA would be social, economic and environmental provide greater accessibility for those without cars in the performance of that cluster. immediate area.
The assessment against these criteria indicates that existing non-residential uses could be consolidated at the DCRBA to establish a new activity centre with comparable outcomes in terms of the type of service provided to that of comparable centres such as St. Helena which also have a limited function in the hierarchy and poor public transport services.
6.6 WOULD THERE BE A CLEAR NET COMMUNITY BENEFIT IF THE DCRBA IS DEVELOPED AS A NEIGHBOURHOOD ACTIVITY CENTRE?
The Panel is satisfied that a supermarket based centre at the DCRBA would provide a shopping option that serves the routine requirements of its catchment, and, despite the below average performance of the centre projected in the early years, the centre may be well patronised. Although the Panel believes that residents of the catchment currently have reasonable access to supermarket based shopping, there would be a small reduction in driving times for some in the potential primary catchment. The established community uses in the DCRBA, particularly the school, would allow multi-purpose trips which are both convenient for consumers and support environmental objectives. The provision of convenience shopping (at a more significant level than provided by the existing service station shops) at the DCRBA would also provide for access by walking or cycling to the relatively low density residential development in the immediate area. This would enhance access to convenience shopping for those without cars.
Against these positive potential outcomes, the analysis in 8.3.7 indicates that there is reason for concern that the development of a full line supermarket based centre at the DCRBA could threaten supermarkets which anchor the Diamond Creek activity centre. Local planning policy is unambiguous in its support for Diamond Creek. Melbourne 2030 has strengthened the established policy that the role and function of Diamond Creek
64 Report of Panel Amendment C22 To The Nillumbik Planning Scheme August 2003 should not be threatened through the designation of that centre as a Major Activity Centre. This designation recognises the community benefit of directing development to centres with a wider range of shopping, service and community infrastructure and suggests that the functions of Diamond Creek should be broadened. Diamond Creek’s location on the PPTN is an important asset that provides the greatest opportunity for public transport trips and the broadest access by those sectors of the community who do not have cars.
On balance, the Panel is not convinced that the development of a new neighbourhood activity centre at the DCRBA would result in a clear net community benefit. The potential benefits of minor reductions in car based travel times to access convenience shopping do not outweigh the risk to anchor uses in Diamond Creek and the benefits to the community that are associated with directing the limited floorspace that can be supported in the area to established activity centres.
6.7 IS THE PROPOSED RESIDENTIAL 1 ZONING APPROPRIATE?
6.7.1 Strategic Justification for the R1Z
There was a degree of consensus that the land to the north of the ridgeline is most suited to residential uses. This is consistent with the view expressed in the 1989 LSP, the draft policy that was prepared (but not approved) when the new format planning scheme was introduced, and the 2002 Activity Centres Review. It also supports existing SPPF and Melbourne 2030 policy to consolidate established urban areas.
As the residential zoning of the land to the north of the ridgeline was not contentious, the focus of the following assessment will be on the justification for the rezoning of the land between the ridge and Diamond Creek Road.
Council’s submission indicated that:
At the heart of the amendment is the desire to allow some limited scope for commercial and community uses, while preventing intensive core retailing.
The Amendment explanatory report provides the following indications of the strategic intent for the land: • The rezoning of land from B1Z to R1Z will ensure that the commercial development permitted on the DCRBA will be complementary to rather than competing with existing centres in the area. • The current B1Z of the DCRBA permits intensive retail uses that will have a detrimental impact on the viability of the Major Activity Centres of Diamond Creek and Eltham and is therefore contradictory to the objectives and strategies of Melbourne 2030. • The 1989 Local Structure Plan, which provided the basis of subsequent planning scheme, identified the area as appropriate for commercial and community uses such as education and religious establishments, indoor sporting and community facilities, drive-in restaurant and take-away food activities, a single 24 hour petrol station and convenience store, plant nursery etc. This description of appropriate uses is proposed for inclusion in the MSS.
65 Report of Panel Amendment C22 To The Nillumbik Planning Scheme August 2003
Thus the strategic basis for the R1Z proposed by the Amendment is firstly directed at avoiding intensive retail development which is possible and indeed a purpose under the current B1Z. In relation to the future use of the DCRBA, the Amendment also proposes to nominate in the MSS the types of uses considered appropriate for the area which are directly derived from the 1989 LSP and were endorsed by the 2002 Activity Centres Review.
Submissions to the Panel had a much stronger focus on the potentially adverse implications of the current zoning rather than strong argument in favour of the uses envisaged for the site. Council submitted that there is a “need” (as the word is used in the Strategic Assessment Guidelines) to rezone the land because “the zoning acts, and unless changed will continue to act, as the impetus for permit applications for inappropriate development.”
Those opposing the Amendment argued that rezoning is not necessary because the existing zoning and planning policy framework allow the merits of proposals to be evaluated against strategic planning objectives.
The Committee acknowledges that the existing planning policy framework does require the key strategic issues to be addressed in decision making. However, the Committee has already commented in section 6.2 that there is a strong policy basis for directing the limited amount of sustainable future retail development to established centres. The Committee has had the benefit of considering the implications of a specific proposal under the existing planning framework. This evaluation is set out in sections 6.3 and concluded there is a significant risk that substantial development of intensive retailing, and a supermarket based centre in particular, would detract from the role and function of Diamond Creek. These factors are likely to continue to apply to other comparable proposals for development of the DCRBA.
The Committee agrees with Council’s submissions that the maintenance of the current planning framework invites ad hoc proposals which are unlikely to gain support but nevertheless consume substantial resources on the part of all interested parties. It is better to provide clearer planning direction for the future of the whole of the DCRBA area.
The Panel expresses concern and frustration that at the end of two amendment processes the vision for the development of the DCRBA has not advanced beyond the view presented in the 1989 LSP and the nature and form of development envisaged remains less than clear. The LSP and MSS suggest that a string of unrelated non-residential uses, such as fast food outlets, are envisaged at the interface with Diamond Creek Road. It is noted that this vision has not been implemented and the land remains substantially vacant. The 2003 Activity Centres Review recommended that some convenience shopping opportunity should be provided for but a limit of a single shop of up to 200 m2 was proposed. The existence of a service station with a convenience shop would effectively mean that further convenience shopping in the DCRBA would not have policy support.
The Panel agrees with the Activity Centre Review recommendation that the opportunity for limited convenience shopping, beyond the very restricted “top up” function of 80m2 shops under the R1Z or the existing shops associated with the service stations. The Panel does not see that the 200m2 floor area limit proposed in the review should necessarily be an absolute limit but agrees that some convenience retailing at a lower level than a full supermarket based centre, could provide the immediate area with a useful service,
66 Report of Panel Amendment C22 To The Nillumbik Planning Scheme August 2003 particularly if Apollo Parkways closes. It is recognised that a lack of appeal in the market place could well mean that provision of small scale convenience retailing would not eventuate.
The Panel is concerned that the LSP list of potential uses appear to have been adopted uncritically. The Panel has significant reservations about the desirability of promoting ribbon development of a string of unrelated non-residential uses for the entire length of the DCRBA simply because the land has a frontage to a main road.
The Panel agrees with Mr. Wyman that the impacts of the site’s main road location are not such that well designed development cannot achieve reasonable residential amenity. Residential development would support planning policy to focus development within the Urban Growth Boundary.
Other potential uses that have not been explored include residential development that is designed to specifically accommodate home businesses, motel or retirement village although the site lacks positive attributes of proximity to an activity centre and effective public transport links for the latter use in particular.
Despite its reservations, the Panel accepts that it is the Planning Authority’s (rather than the Panel’s) role to determine strategic land use directions and the Planning Authority intends to maintain the long established policy of providing for community uses and limited commercial opportunities along Diamond Creek Road. Nevertheless, the Panel believes that the direction in the MSS of uses that may be appropriate in the DCRBA could reasonably be broadened.
6.7.2 Is the R1Z the Most Appropriate Zone?
Mr. McNabb’s evidence evaluated the suitability of the available VPP zones. The Business zones were rejected because they all emphasise various combinations of retail, office and industrial uses which extend well beyond the types of non-residential uses envisaged. The provision for industrial use in the Mixed Use Zone was also deemed inappropriate given the site’s proximity to residential uses and potential amenity impacts.
While it was acknowledged that none of the VPP zones provide a perfect fit with the planning intentions for the DCRBA, the R1Z was considered the most appropriate. The Residential 1 zone has purposes which emphasise residential use and development but also include:
In appropriate locations, to allow educational, recreational, religious, community and a limited range of other non-residential uses to serve the local community.
Mr. McNabb’s assessment endorsed the application of the R1Z on the basis that it is compatible with surrounding areas, it supports Melbourne 2030’s approach to housing intensification, and it is flexible enough to allow a limited range of community and highway related retail and commercial uses while severely restricting retail development.
Council argued that despite the focus on residential use and development in the R1Z, the zone does provide for other uses to serve the local community. The types of uses envisaged for the DCRBA are all able to be considered under the R1Z, except that a
67 Report of Panel Amendment C22 To The Nillumbik Planning Scheme August 2003 convenience shop must have a floor area no greater than 80m2. It is proposed to provide additional policy guidance by highlighting in the MSS the uses considered appropriate.
The Panel generally agrees with Mr. McNabb’s assessment but sees some merit in preserving an opportunity for more substantial convenience shopping opportunities for the immediate area than the 80m2 allowed in the R1Z.
The Panel also notes that rezoning to Residential 1 as proposed in Amendment would provide greater control over signage and would provide policy support for a lower key approach to signs. It would also reduce noise levels allowed under SEPP N-1. Both of these aspects would support the protection of the amenity of the immediate area even if application was made for business or community uses that are possible under the R1Z.
Consideration of VPP zones suggests that the Mixed Use Zone, with policy used to strongly discourage inappropriate proposals for industry and a schedule to address shop and office uses, could establish a framework to support the planning strategies for the area. However, the Panel has some difficulty in advancing this option because those affected have not had an opportunity to consider or respond to the potential implications, including potential limitations in a schedule to the zone.
The maintenance of the existing B1Z for part of the DCRBA is an alternative that would allow consideration of limited local convenience retailing proposals without the risk of retail development at a scale that could undermine activity centres.
6.7.3 Should The Whole of the DCRBA be rezoned?
The Panel is satisfied that there is a clear case for rezoning the land north of the ridgeline to R1Z. The subsequent discussion will focus on land to the south of the ridgeline which has an interface with Diamond Creek Road.
The Panel consideration now turns to which part of the B1Z should be maintained.
Mr. Finanzio argued that, if the Panel concludes that the area of land included in the B1Z should be reduced, the land east of McLaughlans Lane should be the preferred location for retailing because it has better vehicle access due to its corner location, and there is greater flexibility to achieve a development that integrates with residential development to the north of the ridgelines.
Mr. Pitt argued that the Panels, as it is standing in the shoes of VCAT in respect of the application, should apply the established principle that it should determine whether the proposal is appropriate on the site, not whether the site is the best site for the proposal.6 Further “Given that Amendment C22 is in reality a response to the application that principle would also be appropriate to be applied by a Panel in the circumstances of this case.”
Unlike consideration of a planning application which occur within the existing planning framework, an Amendment may have a purpose of establishing the planning framework
6 Multiple References cited e.g. Television Corporation Pty. Ltd v City of Richmond (1985) 16APAD 284, Briant & ors v City of Knox & anor (1985) 15 APAD 443;
68 Report of Panel Amendment C22 To The Nillumbik Planning Scheme August 2003 for an area. In this instance, the Panel evaluation involves consideration of the appropriate planning framework for the Amendment area. This involves consideration of both its role within the activity centre network and the appropriate future for development within the Amendment area. The Panel does not agree with Mr. Pitt that it should not consider which part of the Amendment area is most appropriate for the limited opportunity retail development it considers should be accommodated at the DCRBA.
The Panel assessment in 8.3.7 makes it clear that development of the whole of the DCRBA for Business purposes would impact on existing activity centres and would be contrary to planning policy. The Panel has also indicated that the development of a supermarket based retail centre as part of a new neighbourhood activity centre is not supported and the planning framework should not invite ad hoc proposals which are unlikely to gain support but nevertheless consume substantial resources. However, in order to allow consideration of limited local convenience retailing proposals, the Panel does support the maintenance of part of the land between the ridgeline and Diamond Creek Road in the existing B1Z.
Although the land to the west of McLaughlans Lane provides potential for linkages between the existing school and potential retail development, the Panel believes that the land to the east of McLaughlans Lane south of the ridgeline presents a better location for limited convenience retailing for the following reasons: 1. The site’s corner location provides better access than a mid block location that generates a large number of ‘U’ turns or requires new median breaks; and 2. The existing service station, tyre centre and nursery/garden supplies uses form a cluster of commercial uses that pose interface issues for more sensitive uses.
The Panel supports the retention of the B1Z for the land between the ridgeline and Diamond Creek Road. Non-residential development in this area should be confined to the area that is clearly to the south of the ridgeline to recognise and reinforce the neighbourhood character of the residential areas to the north, contribute to the management of potential amenity impacts, and limit the extent of retail development possible.
It is noted that Mr. Govenlock tabled an aerial photograph at the hearing which suggested a delineation of residential- business areas which provided for non-residential development to a depth of 135 metres from Diamond Creek Road. The Panel inspection of the site indicated that such a delineation would extend well over the ridgeline which is not supported by the Panel. It would also accommodate commercial development well in excess of that supported by the Panel.
The Panel recommends that the B1Z be retained for land east of McLaughlans Lane between the ridgeline and Diamond Creek Road as shown in Appendix 4 (derived from the map in the draft Diamond Creek Road Business Area Policy which was not adopted as part the new format planning scheme). It is recognised that this recommendation would create a parcel of land in two zones but the Panel expects that this issue is likely to be addressed by future subdivision.
6.7.4 Structure Planning Issues
69 Report of Panel Amendment C22 To The Nillumbik Planning Scheme August 2003
The Panel believes there is a real risk of poor quality ribbon development of the DCRBA. Structure planning for the DCRBA is essential to ensure that the future design and development of the subject land is guided and directed by a strategic approach that will facilitate integrated development and complimentary activity.
It is noted that the 2002 Activity Centre Review recommended that structure planning be undertaken and that work be commenced forthwith. At the hearing a working document was tabled which indicated that structure planning work has commenced but the Panel was not invited to evaluated that document because it has not been adopted by Council.
The Panel believes that the Structure Plan should have specific regard to: • Preferred vehicular access arrangements to and from Diamond Creek Road and McLaughlans Lane. • Traffic management in Diamond Creek Road in the vicinity of the subject land. • An equitable apportionment of costs related to the necessary upgrade of adjoining roads and traffic management initiatives. • Pedestrian, vehicular circulation on, and between, the various activities that are to be developed. • Issues at the interface between residential land commercial activities, for example overlooking, noise, light, emissions, out of hours activities, fencing, landscaping and materials. • Pedestrian and Bicycle links and public access through the area, with specific reference to the pipeline reservation and opportunities to integrate the land with the existing open space trails in the vicinity. • Design and appearance of development to Diamond Creek Road and integration of all activities on the land. • Integration of the activities on the land with those in the adjoining areas. • Provision of car parking on the site, to provide the most effective use of spaces whilst minimising visual impact on Diamond Creek Road or the adjoining residential areas. • Built form and design that reflects local character and minimises impact on adjoining residential areas. • Building heights in the vicinity of the ridgeline to minimise visual intrusion of development and sight lines from the valley. • Identification of a preferred range of activities and facilities having regard to the role and function of the area and its relationship to Diamond Creek and St Helena centres and an indication of an appropriate mix of residential forms, styles and lot sizes. • Landscape provisions and protection of the existing flora and fauna. • Loading and un loading facilities for commercial activities • Location and scale of external advertising signs • Indication of a preferred staging program for the development
It is also emphasised that it will not be necessary to prescribe specific use/development responses to all of these issues and in some cases setting clear criteria will provide
70 Report of Panel Amendment C22 To The Nillumbik Planning Scheme August 2003 effective guidance while maintaining flexibility regarding design responses to achieve the best outcomes.
The Panel considered the merits of applying a DPO to ensure that structure planning occurred prior to development. However, drafting of the schedule to a DPO requires careful consideration and the Panel was not prepared to recommend the application of a DPO in the absence of a draft schedule for evaluation by either stakeholders or the Panel. The use of the DPO at this stage was also rejected because third party rights would be reduced for residents in the immediate area who may be affected by the nature of use/development in the DCRBA.
The Panel considers a structure planning process that involves active participation by the stakeholders in the area should occur in the short term with specific design and development provisions subsequently included as appropriate in a DDO or DPO. The Panel recommends that the structure planning work should commence immediately in order to facilitate and expedite appropriate development.
71 Report of Panel Amendment C22 To The Nillumbik Planning Scheme August 2003
7 RESPONSE TO STRATEGIC ASSESSMENT GUIDELINES
The Strategic Assessment Guidelines set out a series of issues to be considered in preparing and assessing an amendment. A brief response to the Guidelines is provided below with discussion of key issues provided in section 6 above.
7.1 IS AN AMENDMENT REQUIRED?
Council submitted that there is a “need” (as the word is used in the Strategic Assessment Guidelines) to rezone the land because “the zoning acts, and unless changed will continue to act, as the impetus for permit applications for inappropriate development.”
Although the existing planning framework does require consideration of the key strategic planning issues for the amendment area, the Panel has accepted that the Amendment is required to ensure that: 1. Development on the DCRBA does not detract from the retail role and function of Diamond Creek; and 2. The planning framework does not invite ad hoc proposals which are unlikely to gain support but nevertheless consume substantial resources.
7.2 WHAT IS THE STRATEGIC BASIS FOR THE AMENDMENT?
The strategic basis for the R1Z proposed by the Amendment is firstly to ensure that intensive retail development, which is possible and indeed a purpose under the current B1Z, does not detract from Diamond Creek, a designated as a major activity centre in Melbourne 2030, the LPPF and the 2002 Activity Centres Review.
Submissions to the Panel in support of the Amendment had a much stronger focus on the potentially adverse implications of the current zoning rather than presenting a strong argument in favour of the proposed zone and additional MSS guidance regarding uses that are considered appropriate for the DCRBA.
In relation to the future use of the DCRBA, the Amendment proposes to nominate in the MSS the types of uses considered appropriate for the area which are directly derived from the 1989 LSP. These directions were endorsed by the 2002 Activity Centres Review but the Panel has expressed significant reservations about the rigour adopted to the analysis of the lower order activity centre network in that review (see section 5.3) and its acceptance of the 1989 vision for the area as a string of unrelated non-residential uses along the main road.
Thus it is with some reluctance that the Panel accepts that there is a strategic basis for rezoning the land from B1Z despite its reservations about the planning framework proposed to replace it.
72 Report of Panel Amendment C22 To The Nillumbik Planning Scheme August 2003
7.3 IS THE AMENDMENT CONSISTENT WITH REQUIREMENTS OF THE PLANNING & ENVIRONMENT ACT
Section 4 of the Planning and Environment Act 1987 sets out objectives for planning in Victoria. Section 12 of the Act requires the planning authority to take into account any significant environmental effects of an amendment and consideration may also be given to social and economic effects. Section 12(A) of the Act also sets out what a MSS should contain. The Panel is satisfied that these matters have been considered in the preparation of the Amendment.
• Ministerial Directions
Minister’s Direction No. 7: Plenty Valley Growth Area which was approved in 1993 requires a planning authority to consider, amongst other things, The Plenty Valley Strategic Plan and any adopted Local Structure Plan. The 1989 Local Structure Plan (LSP) for Plenty/Yarrambat7 was adopted by Council and is therefore required to be considered.
The Panel has discussed the influence of the LSP in section 5.1 and notes that the LSP is now quite dated. Nevertheless, the Planning Authority has taken the LSP into account and used it as the basis for strategic justification for the changes to the MSS proposed in the Amendment.
The Panel is satisfied that the Amendment proposes the use of a standard VPP zone which satisfies the Ministerial Direction On The Form And Content Of The Planning Scheme.
7.4 DOES THE AMENDMENT OR PROPOSAL SUPPORT OR IMPLEMENT THE SPPF, THE LPPF AND MELBOURNE 2030?
The Amendment, and rejection of the application on the church land, is intended to support the SPPF and LPPF strategies to support established activity centres, and in this case Diamond Creek in particular, as the preferred location for additional retail floorspace.
Existing activity centre planning policy in the SPPF promotes concentration of retail development in existing activity centres, while the LPPF identifies Diamond Creek as one of two main activity centres for Nillumbik which should be supported and specifically indicates that development in the DCRBA should not detract from the role and function of Diamond Creek. These activity centre policy directions are strengthened by Melbourne 2030. Melbourne 2030 designates Diamond Creek as a major activity centre which suggests that the planning framework should facilitate a broadening of Diamond Creek’s current role.
Panel evaluation of the key issues in section 6 has concluded that the provision for an extensive area for intensive retailing at the DCRBA, and the development a new supermarket based neighbourhood activity centre, could detract from the role and function of Diamond Creek. The Panel is satisfied that substantial retail development in the
7 Local Structure Plan (LSP) for Plenty/Yarrambat Henshall Hansen Pty Ltd 1989
73 Report of Panel Amendment C22 To The Nillumbik Planning Scheme August 2003
DCRBA could divert the limited addition retail floorspace that can be sustained in the area from Diamond Creek. Further, it considers that the development of a supermarket based centre at the DCRBA could have significant impacts on the supermarkets that fulfil an important anchor use function for the Diamond Creek centre. Substantial retail development at the DCRBA could undermine confidence and future retail investment in Diamond Creek. The Panel is not convinced that the establishment of a new neighbourhood activity centre at the DCRBA would result in a clear net community benefit and is satisfied that that the maintenance of the existing B1Z may well undermine planning policy in the SPPF, the LPPF and Melbourne 2030. The Panel does not believe that the Amendment would compromise the implementation of Melbourne 2030 rather, it would support the implementation of the metropolitan strategy.
The proposed R1Z would limit shop floorspace to 80m2. The Panel believes that ESD objectives of Melbourne 2030 to promote walkable neighbourhoods and access for those without cars, support the maintenance of the opportunity for a limited retail opportunity (ie greater than allowed under the R1Z) for convenience shopping to serve the immediate area. Thus the Panel has recommended that part of the B1Z be retained in the DCRBA.
7.5 DOES THE AMENDMENT HIGHLIGHT ANY CONFLICT BETWEEN MELBOURNE 2030 AND OTHER ASPECTS OF THE PLANNING SCHEME EITHER IN THE SPPF OR LPPF?
The Amendment does not present any particular conflict between Melbourne 2030 and other parts of the planning scheme.
However, the evaluation of the amendment has highlighted that the less definitive treatment of lower order centres in Melbourne 2030 can contribute to a focus on the designated higher order centres at the expense of consideration of the importance of local centres. It can also contribute to a focus on the characterisation of centres rather than strategic planning objectives. These should be short term tensions as Melbourne 2030 foreshadows further work with Councils and local stakeholders which would have a more local focus.
7.6 WHAT ARE THE AMENDMENT CONSEQUENCES FOR THE LPPF?
The MSS indicates that the future use and the development of the Amendment area should be highway related commercial uses, but the Amendment proposes that the statements in the MSS be strengthened to further define appropriate uses for the area. The Amendment includes the following additional statement which indicates preferred uses for the area:
“Uses appropriate for the area include commercial and community activities that benefit from a main road frontage and which provide a service to the local community. Such uses include education and religious establishments, indoor sporting and community facilities, drive-in restaurant and take-away food activities, a single 24 hour petrol station and convenience store and plant nursery.”
The Panel has expressed some reservations about the uncritical resurrection of the 1989 LSP land use expectations for the DCRBA which may well result in ribbon development of unrelated uses. The reference to a “single 24 hour petrol station and convenience
74 Report of Panel Amendment C22 To The Nillumbik Planning Scheme August 2003 store” implies that some further opportunity would be available but the existing development and the limits of the proposed R1Z would exclude a convenience store use.
The Panel can see some merit in at least preserving the option of providing for a limited convenience retailing opportunity east of McLaughlans Lane, particularly if Apollo Parkways closes. This would be intended to serve the immediate locality as well as gaining some support from passing trade. If this recommendations is adopted, the additions to the MSS proposed in the Amendment would require revision.
The Panel has also commented that a wider range of uses than foreshadowed in the proposed additions to the MSS would be reasonable and the range of uses should be broadened accordingly. Further, the Panel does not believe that the DCRBA frontage to Diamond Creek Road presents such substantial amenity impacts that residential development would not be reasonable if it is appropriately designed. The potential for residential development could also be recognised in the MSS.
7.7 DOES THE AMENDMENT MAKE PROPER USE OF THE VPP?
Council’s submissions acknowledged the difficulty in selecting a VPP zone to implement its objectives for the DCRBA but suggested that the R1Z presents the best fit (see discussion in section 6.7.2). Although the Panel sees some merit in applying the Mixed Use Zone to the DCRBA, such a zone has not been canvassed with any affected parties. The Panel has accepted that the R1Z provides an acceptable basis for development of the land north of the ridgelines and west of McLaughlans Lane. However, retention of the B1Z for the land between the ridgeline and Diamond Creek Road east of McLaughlans Lane is recommended to preserve the opportunity for some limited convenience retailing to serve the immediate locality.
The Panel believes that structure planning is required for the DCRBA to ensure coordination of development and to minimise the adverse outcomes that could result from the ribbon form of development that is likely. Matters that should be addressed are discussed in 6.7.4. The C10 Panel report considered the desirability of applying a Development Plan Overlay but accepted submissions that strengthening of the DDO exhibited as part of C10 to establish objectives and criteria directed at preserving opportunities for optimum outcomes could adequately address issues of integration of development. The minimal treatment of the issue in the revisions to the DDO adopted by Council as a result of the C10 Panel recommendation, together with the dismissive approach to this issue in the submissions relating to the supermarket proposal considered by this Advisory Committee, have not instilled confidence in the Panel that the existing approach is effective. The process associated with approval of a development plan would provide greater confidence that important issues are addressed in the planning process but that option was rejected because of the implications for third party rights. The Panel has recommended that structure planning in consultation with stake holders be commenced with subsequent inclusion of provisions in a DPO or DDO as appropriate.
75 Report of Panel Amendment C22 To The Nillumbik Planning Scheme August 2003
7.8 DOES THE AMENDMENT ENHANCE THE PLANNING SCHEME’S STRATEGIC DIRECTIONS, USEABILITY AND TRANSPARENCY?
The rezoning proposed in the Amendment make it clear that substantial proposals for intensive retailing are not be supported. This removes one of the current ambiguities in the planning framework for the DCRBA. As noted earlier, the Panel believes that the MSS identification of uses that are appropriate for the DCRBA should be broadened.
If the Panel recommendations to retain part of the B1Z are maintained is accepted, the MSS should clearly indicate that only limited convenience retailing to primarily serve the local community is considered appropriate.
The Panel also believes that structure planning for the DCRBA would minimise the potential for poor outcomes often associated with ad hoc ribbon development along main roads. This scope of structure planning is discussed in 6.7.4.
76 Report of Panel Amendment C22 To The Nillumbik Planning Scheme August 2003
8 CONCLUSION REGARDING AMENDMENT C22
The Panel evaluation of the Amendment has repeatedly turned to the strong State and local planning policy preference for retail development to be directed to established activity centres. The policy framework for the DCRBA makes it clear that development should not detract from the role and function of Diamond Creek. Melbourne 2030 has reinforced existing activity centre policy and the designation of Diamond Creek as a Major Activity centre anticipates and promotes a strengthening of its role and functions.
Given the existing distribution of convenience shopping opportunities in the vicinity of the DCRBA, the Panel does not believe that there is an urgent need for further supermarket based shopping opportunities. The Panel recognises that the DCRBA zoning and “greenfield” status facilitate immediate development whereas suitably zoned sites of a significant size in other centres, notably Diamond Creek, are not available. However, the strong policy context, the absence of an urgent need for additional supermarket floorspace, and the limited amount of additional retail floorspace that can be sustained in Nillumbik, all indicate that the opportunity to explore opportunities in established centres should be preserved and planning decisions in the short term should not compromise the potential for development in preferred locations. Retailing is a fundamental component of activity centres that underpins their other functions and new retail floorspace should be treated as a strategic resource that should be directed to supporting preferred activity centre locations.
The economic evidence presented to the Panel raised concerns that the development of significant retailing, and a supermarket based centre in particular, would pose a real risk to the vital supermarket anchor uses in Diamond Creek. A decision to establish a new activity centre at the DCRBA could also have an adverse effect on confidence to invest in established centres which could undermine their role and vitality.
The Panel was not convinced that there would be a clear net community benefit in establishing a new activity centre at the DCRBA.
The Panel has accepted that there is a strategic basis for rezoning at the DCRBA to preclude extensive development for intensive retailing and to ensure that planning framework does not invite ad hoc proposals which are unlikely to gain support but nevertheless consume substantial resources. However, the Panel can see some benefit in maintaining a limited opportunity for convenience retailing to serve the immediate area, particularly if the centre at Apollo Parkways closes. The Mixed Use zone may have been suitable for this area but has not been canvassed through the amendment process with stakeholders. It is recommended that part of the DCRBA, (south of the ridgeline to the east of McLaughlans Rd) retain the current B1Z.
Although the Panel has largely accepted the arguments in support of rezoning, it is disappointed that after two protracted amendment processes a strategic framework to direct development in the area does not exist.
The Amendment proposes to nominate in the MSS the types of uses considered appropriate for the area which are directly derived from the 1989 LSP (eg community uses, restaurant or takeaway food and nursery) and were endorsed by the 2002 Activity
77 Report of Panel Amendment C22 To The Nillumbik Planning Scheme August 2003
Centres Review. The Panel has questioned the rigour adopted in the analysis of the lower order activity centre network in that review (see section 5.3) and its apparently unquestioning acceptance of the 1989 “vision” for the area as a string of unrelated non- residential uses along the main road. The Panel believes that Council should take a more strategic approach to planning for lower order Activity Centres and the Review document should be strengthened.
The Panel accepts that it is the Planning Authority’s role to determine strategic land use directions and the Planning Authority intends to maintain the long established policy of providing for community uses and limited commercial opportunities along Diamond Creek Road. Nevertheless, the Panel believes that uses to be identified in the MSS as appropriate in the DCRBA could reasonably be broadened. The Panel agreed with submissions that the impacts of the DCRBA’s main road location are not such that well designed development cannot achieve reasonable residential amenity. Examples of other potential uses that have not been explored or identified as potentially appropriate include residential development designed to specifically accommodate home businesses, motel or retirement village.
The Panel also believes that in order to minimise the negative aspects of ribbon development, structure planning would be necessary to address relationships between uses, access, built form and the treatment of the interfaces. (see further discussion in section 7.7) The minimal treatment of the issue of integration of development in the revisions to the DDO adopted by Council as a result of the C10 Panel recommendation, together with the dismissive approach to this issue in the submissions relating to the supermarket proposal considered by this Panel, suggest that structure planning in consultation with stakeholders should be undertaken forthwith. Consideration should then be given to including elements of the structure plan in a DDO or DPO as appropriate.
78 Report of Panel Amendment C22 To The Nillumbik Planning Scheme August 2003
9 PANEL RECOMMENDATIONS
On the basis of the evidence provided at the hearing and in written and oral submissions, and the conclusions reached in the previous chapters of this report, the Panel recommends that Amendment C22 to the Nillumbik Planning Scheme (as exhibited) be approved with the following changes:
Zoning
1. The land to the east of McLaughlans Lane between the ridgeline and Diamond Creek Road (generally as shown in Appendix 4) be retained as Business 1 Zone to allow consideration of applications to serve the convenience shopping needs of the immediate area.
Municipal Strategic Statement
2. The Municipal Strategic Statement note the potential for limited convenience shopping in Business 1 Zone on the north east cnr McLaughlans Lane but clearly indicate that only limited convenience retailing primarily to serve the local community is considered appropriate.
3. The Municipal Strategic Statement identification of appropriate uses for the DCRBA be broadened. Consideration should be given to including uses such as home businesses, motels, retirement village, and the like.
Structure Planning
4. Structure planning work should commence immediately in order to facilitate and expedite appropriate development. A structure planning process that involves active participation by the stakeholders in the area should occur in the short term, with specific design and development provisions subsequently included as appropriate in a DDO or DPO. (See 6.4.7 for discussion of the scope of matters to be addressed)
79 Report of Panel Amendment C22 To The Nillumbik Planning Scheme August 2003 Appendix 1
Panel/Advisory Committee Directions
80 Department of Sustainability and Environment PO Box 500 Enquiries No: (03) 9655 8744 East Melbourne Victoria 3002 Contact: Miss Diana Michetti Telephone: 9637 8000 Reference No:STA/2002/000700 Facsimile: 9637 8100 ABN: 90 719 052 204 DX 2100098 2 April 2003
As Addressed
Dear Sir/Madam
RE: NILLUMBIK PLANNING SCHEME – AMENDMENT C22 & PLANNING APPLICATION FOR REVIEW NO: 891/2001
As someone who wishes to be heard by the Panel in respect of the above matter, a copy of the timetable for the public hearing is enclosed for your information.
Would you please make a note of when you are scheduled to be heard. If for any reason you are unable to be present at the appropriate time, it would be appreciated if you would let Miss Diana Michetti know on Tel: (03) 9655 8744 or Fax on (03) 9655 8740 as soon as possible.
Also enclosed is some information about the hearing.
As an outcome of the directions hearing held on Wednesday 26 March, 2003 the following directions were made: • The hearing dates of 4, 5, 10, 11, 12, 17, 18, 19 June, 2003 were confirmed. • The Panel and Advisory Committee has only received the application form and plans associated with application for review No: 891/2001. If the application included any supporting reports, the applicant must lodge four copies of those reports with Planning Panels Victoria by 12 May, 2003. The documentation provided to the Panel and Advisory Committee did not include the site analysis and descriptive statement explaining how the proposed development responds to the site and its context required pursuant of Clause 19.03-2 of the Nillumbik Planning Scheme. The permit applicant should forward four copies of the statement to Planning Panels Victoria by 12 May, 2003. If this information was not submitted with the application, three copies should also be lodged with Council by the same date. The information will be available to submitters at Planning Panels Victoria and the Shire of Nillumbik during normal office hours. • Any amendments to the application for permit must be circulated to the Panel/Advisory Committee and the parties to the hearing by 2 May, 2003.
• Council must lodge with Planning Panels Victoria and circulate to all parties by 27 May, 2003 a draft of all conditions with it considers a permit should contain if granted.
• The Panel and Advisory Committee will have regard to the Practice Note Strategic Assessment Guidelines, Ministerial Directions No 7. Plenty Valley Growth Area, Ministerial Direction No.9 Metropolitan Strategy, Planning Panels Victoria Metropolitan Strategy – Guidelines for Planning Panels, and the zone decision guidelines. The Council must explicitly address these directions and guidelines. Other parties are also encouraged to have regard to the directions and guidelines when preparing their submissions.
• Design and Development Overlay Schedule 4 Diamond Creek Road Business Area was adopted by Council on 19 March 2003. The provisions of that proposed overlay must be addressed by Council and the applicant in their submissions and other parties are encouraged to take the proposed overlay into account in the preparation of their submission.
• Any party intending to call an expert witness to address economic and retailing matters must advise Miss Diana Michetti, Planning Panels Victoria of the name and contact details of the expert witness by Friday 4 April, 2003.
• Expert witnesses dealing with economic matters or retailing are directed to consult prior to the commencement of public hearings. The purpose of the consultation is to develop a statement of matters on which there is agreement and matters that are disputed. The consultation between expert witnesses should be completed by 3 May, 2003 and the statement should be submitted to Planning Panels Victoria by 10 May, 2003. If any expert witness is instructed by a party not to attend the consultation sessions or instructed not to reach agreement in respect of points of difference, the fact of such instructions must be reported in writing to the Panel and Advisory Committee by the expert witness concerned. The consultation between expert witnesses should be independent of the parties to the hearing.
• As part of the consultative process between economic expert witnesses, the methodology, assumptions and inputs that are relevant to each stage of the analysis that contributes to assessments must be clearly explained and documented to enable all parties to gain a clear understanding of the basis of evidence to be presented. • The Panel and Advisory Committee will be assisted if economic impact assessments take account of the following matters:
• The cumulative impact on existing centres arising from the planned or potential development of additional retail floorspace elsewhere within the catchment, in addition to the projected impact on existing centres arising from the potential additional retail floorspace on the subject land.
• The potential economic impact on existing centres if the whole of the Amendment area was eventually developed for retail use for business purposes.
• The effect of economic circumstances and trading characteristics of the affected centres, rather than merely assuming that a predetermined level of diversion of income from an existing centre is acceptable.
• Any party who is proposing to call an expert witness must ensure that copies of their witness report or statements are exchanged 10 working days prior to the hearing, i.e. by close of business Friday 16 May, 2003. Copies of expert reports or statements should be distributed as follows:
Planning Panels Victoria 4 Copies plus an electronic copy (Word Format) Council 3 Copies The Applicant 2 Copies DSE 1 Copy Other submitters calling 1 Copy each experts
Miss Michetti, Planning Panels Victoria will have details of addresses of parties calling witnesses.
One copy of the information lodged will be available at Planning Panels Victoria to submitters and the public and Council will make two copies of the information lodged available during normal office hours.
• Any party intending to call an expert witness must advise Planning Panels Victoria of the details of who will be called and the order in which witnesses will be called by close of business Friday 16 May, 2003. • The Panel and Advisory Committee also requests that all copies of submissions and expert witness reports provided to it, be stapled and hole punched rather than bound. It would assist the Panel and Advisory Committee if an electronic copy is provided of lengthy submissions which have been prepared using word processing.
• Council should ensure that a map showing the location of submitters, the relevant planning scheme maps, aerial photos of both the subject site and the Diamond Creek Town centre and any other helpful information is available at the hearing.
Please note that under Section 159 of the Planning and Environment Act 1987, a panel may refuse to hear any person who fails to comply with a direction of the panel.
Yours sincerely
Diana Michetti Administrative Support Officer Planning Panels Victoria Report of Panel Amendment C22 To The Nillumbik Planning Scheme August 2003
Appendix 2
Design and Development Overlay Schedule 4 Diamond Creek Road Business Area (DDO4)
85
Report of Panel Amendment C22 To The Nillumbik Planning Scheme August 2003
Appendix 3
Nillumbik Planning Scheme Amendment C10 Panel Conclusions & Recommendations
88 AMENDMENT C10 NILLUMBIK PLANNING SCHEME PAGE 67 REPORT OF PANEL SEPTEMBER 2002
6 CONCLUSIONS – KEY ISSUES
Council’s submission and planning evidence called by Council relied heavily on the proposition that the rezoning to Business 4 proposed in the Amendment is consistent with past strategies for the area expressed in the Diamond Valley Local Structure Plan (LSP) prepared in 1989 and the Diamond Valley Special Business No.1 Zone. The Panel does not accept that the proposed Business 4 Zone is consistent with either of those documents. The LSP specifically identified bulky goods retailing (referred to at that time as peripheral sales) as inappropriate and the Special Business Zone prohibited bulky goods retailing (and most other types of shop).
Significantly, the Council had not undertaken any analysis of the demand or suitability of the site for bulky goods retailing in the development of the Amendment. Economic evidence presented at the hearing focused on the potential impacts of particular development proposals for which applications have been lodged under the current zoning. Analysis of the implications of the rezoning to Business 4 proposed by the Amendment consisted of generalised comments. These comments from the economic experts suggested that the size of sites in the Amendment area and the “outboard” location relative to the larger catchment required for this type of retailing, would substantially limit its appeal for larger scale bulky goods retailers but there may be some scope for smaller scale “opportunistic businesses” seeking highway frontage locations.
The Panel was not convinced that a sound strategic basis was established for the proposed rezoning to Business 4.
An alternative argument in support of the rezoning would be that the current Business 1 Zone does not support planning strategies.
Council advised that the current Business 1 Zone was inadvertent and was introduced as the result of an error when the New Format Planning Scheme was introduced. The Panel accepts that there was an error when the new scheme was exhibited. However, the planning framework for the DCRBA put forward by Council for approval after exhibition of the new planning scheme suggests that it had considered the particular circumstances of the DCRBA site. The planning framework put forward included:
• an indication in the MSS that development in the DCRBA should not undermine the role and function of Diamond Creek;
• specific reference to the DCRBA in the Business 1 Zone schedule so as to require a permit for larger shops; and
• a local policy which provided land use guidance indicating that “The area is intended to provide for commercial uses which provide convenience shopping or generally AMENDMENT C10 NILLUMBIK PLANNING SCHEME PAGE 68 REPORT OF PANEL SEPTEMBER 2002
require large sites that benefit from trade and access provided by a main commuter road such as Diamond Creek Road”. The policy also set out development requirements. The policy was not approved because it had not been exhibited.
The Panel notes that, even without the proposed policy, the approved planning framework was more consistent with Council’s strategy to promote a highway related commercial area at the DCRBA than the originally intended Business 2 Zone which prohibited all shops. It was also more consistent with planning reform principles to allow consideration of the merits of proposals within a strategic framework. The Panel does not accept that the Amendment can be justified on the basis of correcting an inadvertent mistake.
The LPPF includes a strategy to:
“Concentrate the Shire’s major retail activities in Eltham Town Centre and Diamond Creek.”
Although limited analysis was provided regarding opportunities in either centre, the potential sites discussed at the hearing suggested that appropriate sites in Diamond Creek are not readily available. Further, the Diamond Creek Township Strategy 1999 did not contemplate or provide for any significant additions to retail floor space beyond the site adjacent to the station which has since been developed for a supermarket and specialty shops.
The LPPF also includes a clear strategy to ensure that use and development of the DCRBA “does not detract from the retail role and function of Diamond Creek township.” The Panel has emphasised that its role does not extend to determining whether a particular development proposal or level of retail development is acceptable or not. Rather, the Panel must consider the planning framework and whether a change of zoning is necessary to support strategies directed at protecting Diamond Creek.
The Council submission in support of the Amendment, and the economic evidence it called, included a consistent subtext that the rezoning from the current Business 1 Zone was necessary to support that strategy.
The economic analysis presented to the Panel suggests that some population growth in the immediate vicinity of the DCRBA, recapturing some expenditure that is currently escaping, and growth in per capita spending, could support some additional retail floorspace in the Amendment area without unacceptable impacts on the Diamond Creek township. However, given the substantial reservations expressed by the Panel in section 5.3 about the evidence presented, the Panel has not been able to draw any definitive conclusion as to the extent or timing of the provision of new retail floorspace on the subject land under the existing Business 1 zone, without adversely affecting the role and function of Diamond Creek. The extrapolation of the projected impacts suggested by the economic evidence makes it clear that impacts on other centres would be a very real issue as the extent of development AMENDMENT C10 NILLUMBIK PLANNING SCHEME PAGE 69 REPORT OF PANEL SEPTEMBER 2002 of the zone for core retailing increases. This is an issue that should be addressed by the Planning Authority in the further development of the planning framework for the DCRBA based on appropriate strategic analysis.
The current Business 1 zone schedule requirement for a permit for shop use, together with LPPF strategies, mean that evaluation of the impacts of specific proposals on Diamond Creek must occur as part of the consideration of any planning application. The evidence presented to the Panel suggested that development in the DCRBA does pose a real risk to the role and function of Diamond Creek and a rigorous approach should be adopted to that assessment. However, the Panel is satisfied that the existing planning framework provides for evaluation of proposals against key strategies, albeit in the context of limited guidance about lower order commercial centres. A clear need to remove the discretion to consider shop uses in the zone has not been demonstrated.
The Panel also notes that the current zoning allows discretion to consider residential development but that use would be prohibited under the proposed Business 4 zone. The Panel believes that, in the absence of clear justification for the uses encouraged under a Business 4 Zone, this option should be retained, particularly in relation to land to the north-west of the ridge.
There was a high degree of acceptance of the Design and Development Overlay proposed. The requirements in the proposed overlay are consistent with requirements that applied throughout the 1990’s but were omitted in the new format planning scheme. The Panel agrees with submissions that discretion should be available to vary the overlay requirements.
The Panel has also identified the need to ensure that the framework for development achieves an integrated form of development. The potential for a Development Plan to address both issues of appropriate land use and integration of development was canvassed at the hearing. Despite concerns expressed by landholders regarding the complexity of formulating a plan that is acceptable to the various stakeholders, the Panel does see considerable merit in the DPO as a mechanism to achieve optimum outcomes for the community. The complexity in reaching agreement would be a reflection of the issues to be addressed. The overlay does not need to prescribe specific design or land use solutions but could establish criteria to be satisfied. Nevertheless, the Panel accepts that the Planning Authority has not undertaken the analysis on which to base the more comprehensive planning framework allowed by the overlay. As a minimum, the Design and Development Overlay proposed in the Amendment should include requirements to ensure that development proposals demonstrate that opportunities for an integrated approach to development of the precinct are exploited.
Overall, the Panel was not satisfied that sound justification for the proposed rezoning to the Business 4 zone was established. The Business 1 zone should be maintained AMENDMENT C10 NILLUMBIK PLANNING SCHEME PAGE 70 REPORT OF PANEL SEPTEMBER 2002 but the Planning Authority should work towards achieving more explicit policies and strategies relating to neighbourhood shopping generally and for the future use and development of the DCRBA in particular. The Design and Development Overlay proposed in the Amendment is accepted as reasonable, subject to providing discretion to vary overlay requirements and strengthening to ensure an integrated approach to the development of the DCRBA as a whole. AMENDMENT C10 NILLUMBIK PLANNING SCHEME 78 REPORT OF PANEL SEPTEMBER 2002
9 RECOMMENDATIONS
After considering all submissions and material presented to it and for the reasons set out in the report, the Panel recommends that:
1. Council should confirm with the owners of the property affected by the Amendment (but not identified in the Amendment’s written documentation) who did not make a submission, that they were aware that the Amendment proposes to rezone their property and apply a Design and Development Overlay. If they were not aware that their property is directly affected by the Amendment, they should be given an opportunity to make a submission prior to further consideration of the Amendment.
2. The rezoning of the subject land to Business 4 should be abandoned. Rezoning of the area shown on Amendment maps to B4Z and changes to Clause 21.03-4 should be deleted from the Amendment. Reference to the Business 4 Zone should also be deleted from Clause 21.05-4.
3. The Design and Development Overlay be approved with the following changes:
• Discretion should be provided to allow consideration of the merits of proposals that adopt alternative design solutions to achieve development objectives for the area.
• Inclusion of objectives and planning criteria to ensure integrated development of the precinct as a whole.
4. That Council undertake further work with a view to:
• Providing further guidance about planning expectations and strategies for lower order commercial centres;
• Establishing the most appropriate future use of the DCRBA. The outcome of this analysis may justify future changes to the current zoning of the land, or could support the introduction of a policy or Development Plan Overlay to address land use issues. Report of Panel Amendment C22 To The Nillumbik Planning Scheme August 2003
Appendix 4
Identification of Land Recommended to be Retained in Business 1 Zone
94