KAUFLAND STORES in VICTORIA ADVISORY COMMITTEE 1158 Nepean Highway, Mornington

KAUFLAND STORES IN VICTORIA ADVISORY COMMITTEE 1158 Nepean Highway, Mornington

STATEMENT OF TOWN PLANNING EVIDENCE PREPARED BY BRENDAN ROGERS

P0006177 FEBRUARY 2019 URBIS STAFF RESPONSIBLE FOR THIS REPORT WERE: Director Brendan Rogers Associate Director Tarquin Leaver Project Code P0006177 Report Number Rep_01

urbis.com.au

INTRODUCTION 1. My name is Brendan Rogers and I am a Director of Urbis Pty Ltd which conducts its business at Level 12, 120 Collins Street, Melbourne. My qualifications and experience are described at Appendix A in accordance with the relevant Guide to Expert Evidence prepared by Planning Panels Victoria (PPV).

2. I have been requested by Rigby Cooke Lawyers on behalf of Vicinity Centres and ISPT (Vicinity) to prepare a town planning assessment of the proposed planning scheme provision changes for the site at 1158 Nepean Highway, Mornington.

3. My written instructions required me to consider whether the proposal is appropriate having regard to:

 Any regulatory framework applicable to the proposal which is within my expertise to examine and comment on;

 My own judgement and experience; and

 Any other matter which I regard as relevant to the formulation of my opinion.

4. The proposed planning scheme provision changes involve the following:

 Apply the Specific Controls Overlay to the above land and update the schedule to the Specific Controls Overlay accordingly.

 List the proposed “Kaufland supermarket development, 1158 Nepean Highway, Mornington” incorporated document in the schedule to clause 45.12 and clause 72.04 as an incorporated document to the Kingston Planning Scheme. 5. In the course of preparing this evidence I have inspected the subject site and its environs and have reviewed the proposed changes to the planning scheme provisions. In addition, I have read (amongst a range of background documents) the relevant supporting documentation.

6. A summary of my opinions with respect to the proposed planning scheme provisions as they apply to the subject land is as follows:

 I acknowledge and accept that there are economic benefits to Kaufland’s entry into the Australian market.

 The economic benefits for the associated retail and other uses allowed under the Incorporated Document are not identified;

 The proposal is likely to alter the focus of the Mornington Homemakers centre, resulting in a precinct which competes with, rather than complements, the Mornington Major Activity Centre; and

 I therefore consider that the Kaufland Supermarket and additional uses on this site are not supported by policy and should not be approved.

7. I declare that I have made all the enquiries that I believe are desirable and that no matters of significance which I regard as relevant have, to my knowledge, been withheld from the Panel.

KAUFLAND STORES IN VICTORIA ADVISORY COMMITTEE INTRODUCTION 1

SUBJECT SITE AND SURROUNDS THE SUBJECT SITE 8. The subject site is located on the south-east corner of the intersection between Nepean Highway and Oakbank Road. The total site area is in excess of 6 hectares, with approximately 2 hectares of this area affected by the Incorporated Document. The site is shown in the site identification plan below.

Figure 1: Site identification Plan (from Information Sheet December 2018)

9. The land is currently used for the manufacturing of shoes by Bata, with associated at-grade car parking and landscaping. The land is otherwise vacant (although it has recently been used as a temporary location for Silvers Circus). THE SURROUNDING AREA 10. Surrounding land is generally used for residential purposes (at various densities) to the north and east. Land to the north is at a much lower density, being within a Green Wedge Zone and outside the urban growth boundary. Land to the west is used for a school and golf course and is otherwise used for residential purposes.

11. Land to the south is within the same Industrial 3 Zone as the subject site and is used primarily for big-box retail, including stores such as Officeworks, Fantastic Furniture, Harvey Norman, and Bunnings, but also includes uses also commonly located in Activity Centres, including Rebel Sport, Fernwood Fitness, and an Aldi Supermarket. Two food and drink offerings also exist in the centre. The area of this industrial precinct and that of the Mornington Major Activity Centre (as defined by the DDO13) is shown at Figure 4.

12. The Mornington Activity Centre is approximately 2km to the south-west of the site, which contains a main street shopping precinct, with the Mornington Central Shopping Centre to the rear, and a series of community facilities, including the Mornington Council offices and Library. This is the only Activity Centre within a 5km radius of the subject site. This reflects the development pattern of separate and relatively evenly spread townships along the coast. These townships are of varying sizes, with Mornington and Rosebud being the major centres on this side of the Peninsula. Frankston, which is

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identified in Plan Melbourne as a Metropolitan Activity Centre, is approximately 11km to the north. These township areas are separated by lower density development, including land outside the Urban Growth Boundary (as is immediately to the north of the subject site, shown in Figure 5).

13. The location of supermarkets in the area is shown in Figure 6.

Figure 2 – Subject Site Aerial Photograph

Figure 3 – Photo of the Subject Site

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Figure 4: Area Comparison

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Figure 5: Broader Area Zoning Map

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Figure 6: Supermarket Locations

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PLANNING CONTROLS 14. The subject site is covered by the following planning controls: ZONE Industrial 3 Zone

15. The subject site is located within the Industrial 3 Zone (I3Z). The purpose of the zone is:

 To implement the Municipal Planning Strategy and the Planning Policy Framework.

 To provide for industries and associated uses in specific areas where special consideration of the nature and impacts of industrial uses is required or to avoid inter-industry conflict.

 To provide a buffer between the Industrial 1 Zone or Industrial 2 Zone and local communities, which allows for industries and associated uses compatible with the nearby community.

 To allow limited retail opportunities including convenience shops, small scale supermarkets and associated shops in appropriate locations.

 To ensure that uses do not affect the safety and amenity of adjacent, more sensitive land uses.

16. A supermarket use is section 1 (permit not required) subject to the following conditions:

 the leasable floor area must not exceed 1800 square metres.

 the site is must adjoin, or be within 30 metres of, a road in a Road Zone.

 Must be on land within an urban growth boundary and in metropolitan Melbourne.

17. If the use does not comply with these conditions, it becomes a Section 3 (prohibited) use. By virtue of its size, the current proposal is a prohibited use under the current controls.

18. In terms of the uses proposed to be allowed by the Incorporated Document:

 Shop (other than adult sex product shop, convenience shop, restricted retail premises and supermarket) is a Section 1 permit not required use subject to conditions, being:

o Must adjoin, or be on the same lot as, a supermarket when the use commences.

o The combined leasable floor area for all shops adjoining or on the same lot as the supermarket must not exceed 500 square metres.

o The site must adjoin, or be within 30 metres of, a road in a Road Zone

The use becomes prohibited if the conditions are not met.

Convenience shop is a permit not required use with no conditions.

For the Incorporated Document, this includes shop (except for adult sex product shop, department store, laundromat, restricted retail premises).

 Office is a permit required use. For the Incorporated Document, this includes bank, electoral office, medical centre, real estate agency and travel agency.

 Place of Assembly is a permit required use. For the Incorporate Document, this includes art gallery.

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 Retail Premises is a permit required use. For the Incorporated Document, this includes food and drink premises except for hotel or tavern is a permit required use (except for take away food premises which is as of right) and postal agency.

19. A permit is required to construct a building or construct or carry out works (Clause 33.03-4).

Figure 7 – Site Zoning Map

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OVERLAYS Development Plan Overlay (Schedule 2)

20. The subject site is located within the Development Plan Overlay Schedule 2 (DPO2). The purpose of the overlay is:

 To implement the Municipal Planning Strategy and the Planning Policy Framework.

 To identify areas which require the form and conditions of future use and development to be shown on a development plan before a permit can be granted to use or develop the land.

 To exempt an application from notice and review if a development plan has been prepared to the satisfaction of the responsible authority.

21. Schedule 2 provides direction for the Mornington Parkland Industrial Area. It provides requirements for development on this site and the industrially zoned precinct to the south.

Figure 8 – Development Plan Overlay

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22. The site is also partially within a designated bushfire prone area, although the building itself would be outside this area as is shown below.

Figure 9: Designated Bushfire Prone Area

PARTICULAR PROVISIONS 23. A planning permit may also be triggered under the following particular provisions:

 Clause 52.05 – Signs

 Clause 52.06 Car Parking

 Clause 52.27 Licensed Premises

 Clause 52.29 Land Adjacent to a Road Zone Category 1

 Clause 52.34 Bicycle Facilities

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PLANNING POLICY FRAMEWORK 24. The Planning Policy Framework (PPF) seeks to foster planning outcomes for Victoria which appropriately balance social, economic and environmental objectives. It reflects the key elements of Plan Melbourne. Planning Policy calls for the consideration of a range of issues in the determination of land use and development planning.

25. Policies of relevance to the subject site include:

 Clause 11 – Settlement “Planning is to anticipate and respond to the needs of existing and future communities through provision of zoned and serviced land for housing, employment, recreation and open space, commercial and community facilities and infrastructure.” Clause 11 “To promote the sustainable growth and development of Victoria and deliver choice and opportunity for all Victorians through a network of settlements.” Clause 11.01-1S “Develop compact urban areas that are based around existing or planned activity centres to maximise accessibility to facilities and services.” Clause 11.01-1S “Ensure retail, office-based employment, community facilities and services are concentrated in central locations.” Clause 11.01-1S “Develop a network of activity centres linked by transport; consisting of Metropolitan Activity Centres supported by a network of vibrant major and neighbourhood activity centres of varying size, role and function”. Clause 11.01-R “To encourage the concentration of major retail, residential, commercial, administrative, entertainment and cultural developments into activity centres that are highly accessible to the community.” Clause 11.03-1S “Build up activity centres as a focus for high-quality development, activity and living by developing a network of activity centres that:

o Comprises a range of centres that differ in size and function. o Is a focus for business, shopping, working, leisure and community facilities. o Provides different types of housing, including forms of higher density housing. o Is connected by transport. o Maximises choices in services, employment and social interaction.” Clause 11.03-1S  Clause 15 – Built Environment and Heritage Planning should:

o “ensure all new land use and development appropriately responds to its surrounding landscape and character, valued built form and cultural context”; o “protect places and sites with significant heritage, architectural, aesthetic, scientific and cultural value”; o “promote development that is environmentally sustainable and should minimise detrimental impacts on the built and natural environment”. Clause 15 includes policy direction on building design, built environment, healthy neighbourhoods, neighbourhood character, urban design, sustainable development and heritage.

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 Clause 17 – Economic Development “Planning is to contribute to the economic well-being of the state and foster economic growth by providing land, facilitating decisions, and resolving land use conflicts, so that each region may build on its strengths and achieve its economic potential”. (Clause 17) “Protect and strengthen existing and planned employment areas and plan for new employment areas.” (Clause 17.01-1S) “Plan for industrial land in suitable locations to support employment and investment opportunities.” (Clause 17.01-1R) “To encourage development that meets the community’s needs for retail, entertainment, office and other commercial services.” (Clause 17.02-1S) “Ensure commercial facilities are aggregated and provide net community benefit in relation to their viability, accessibility and efficient use of infrastructure.” (Clause 17.02-1S) “Locate commercial facilities in existing or planned activity centres.” (Clause 17.02-1S) “Provide new convenience shopping facilities to provide for the needs of the local population in new residential areas and within, or immediately adjacent to, existing commercial centres.” (Clause 17.02-1S) “Provide small scale shopping opportunities that meet the needs of local residents and workers in convenient locations.” (Clause 17.02-1S) “Discourage proposals for expansion of single use retail, commercial and recreational facilities outside activity centres”. (Clause 17.02-2S) “Give preference to locations in or on the border of an activity centre for expansion of single use retail, commercial and recreational facilities.” (Clause 17.02-2S) “Ensure that out-of-centre proposals are only considered where the proposed use or development is of net benefit to the community in the region served by the proposal or provides small scale shopping opportunities that meet the needs of local residents and workers in convenient locations.” (Clause 17.02-2S) “Protect industrial activity in industrial zones from the encroachment of commercial, residential and other sensitive uses that would adversely affect industry viability.” (Clause 17.03-2S) “Avoid approving non-industrial land uses that will prejudice the availability of land in identified industrial areas for future industrial use.” (Clause 17.03-1S)

Municipal Strategic Statement 26. Clause 21.02 – Profile of the Mornington Peninsula describes the employment in the Peninsula as follows:

Employment on the Peninsula is based on a few large employers, and many small ones. Most jobs are generated by town based activities such as retailing, construction, business services, health, education and community services. These categories account for over 52 per cent of total employment, emphasising the importance of the major towns as employment and activity centres. Township employment is supported by both the demands of local residents and the additional trade generated by visitors, which has been estimated to account for up to 23 per cent of turnover in tourism focussed centres.

Manufacturing is also important, employing 28 per cent of the workforce. Many of the Shire’s industrial areas display a mix of service industry and sales/supply yards, indicating a local trade base. Extractive industries, including the Pioneer and Hillside quarries in Dromana, employ less than 1 percent of the workforce but remain important resources.

27. Clause 21.03 – Mornington Peninsula – Regional Role and Local Vision seeks to strengthen commercial activity centres, stating that:

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The Shire’s town centres are more than a collection of shops; they are community centres that substantially contribute to the quality of life for the Peninsula’s residents and visitors. It is important to strengthen the existing centres:

 Economically - by providing commercial land to accommodate sustainable levels of commercial floor space, seeking to address gaps in the range of retail services, and coordinating public and private investment in the town centres.  Functionally - through traffic management and parking provision and the integration of pedestrian ways and linkages, including the promotion of continuous retail streetscapes.  Environmentally - through development design that recognises the importance of these areas to the community and that supports a distinct township identity; and through the provision of appropriate infrastructure to service town centres.

In terms of Industrial areas, it states that:

The township industrial areas provide an important employment base as well as services to the local population. The ability to attract more regionally based industry and employment depends on maintaining appropriate land resources, insulated from residential areas and with the necessary supporting infrastructure. Industrial areas are often located at the “gateway” to townships and adjacent to main roads, and strongly influence the presentation of the townships. Design in these areas needs to respond to both the opportunities and responsibilities associated with this level of public exposure. These areas often attract bulky goods retailing and provision may be made in these areas for restricted retailing, provided the retail function of the town centres is not compromised.

28. Clause 21.04 – Mornington Peninsula Strategic Framework Plan shows Mornington as a “Major Town” and an “Activity Node”.

29. Clause 21.06 – Strategic Framework and the Peninsula’s Settlement Pattern states that:

The major towns of the Peninsula, including Mornington, Somerville, Hastings, Dromana and Rosebud provide access to services, employment and recreational opportunities for the majority of the Shire’s residents and visitors. It is important to strengthen these major centres by consolidating future population growth within their defined growth boundaries. This will provide increased population to support a wider range of services and facilities and provide a focus for economic activity, both in the short term through construction activity and in the longer term, based on the development of community services, commercial activity, retailing and service industry.

30. Clause 21.07 – Guiding Future Township Development includes direction on activity centres at Clause 21.07-3, describing them as “focal points for community life that reflect local character and identity. They offer a wide range of services to residents and visitors. They provide the majority of business and employment opportunities, contribute to the variety of housing choices and support public transport links”. Mornington is shown as a major activity centre, with four convenience centres scattered around the periphery.

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Figure 10: Hierarchy of Activity Centre

31. Additional direction within Clause 21.07-3 is that:

Additional retail and office development should be directed primarily to Major Activity Centres and to a lesser extent to Large Township Activity Centres, in a way that is commensurate with population growth in their catchments.

Additional retail and office development in Small Township Activity Centres and Local Activity Centres should be of a limited extent only. No material extension of Convenience Centres should take place.

There is no need for any new major, township or local activity centre on the Peninsula in addition to the activity centres shown in Table 1 to this clause and on the map to this clause.

Directing additional commercial development to Major and Large Township Activity Centres will not only support a compact development pattern on the Peninsula, it will also facilitate a high level of service to the community. It will enhance the role of activity centres as the focus for community life. Concentrating a broad range of activities in Major and Large Township Activity Centres generates multiplier effects and contributes to the ‘critical-mass’ for business and employment opportunities. It provides certainty needed for investment decisions for commercial development. It will also protect the smaller centres from inappropriate levels of commercial development.

Fragmentation of commercial activity is not in the long term interests of the community. Strengthening the existing hierarchy of activity centres is sustainable, equitable and achieves net community benefit.

Out-of-centre retail, service station and office developments detract from compact urban patterns. This is detrimental to the established hierarchy of centres and should be avoided.

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other out-of-centre locations. The land area and vehicular access requirements of these clusters make them unsuitable for a location in the heart of activity centres. These clusters should be directed to the edge of the three townships with major activity centres on the Peninsula. There they contribute to the overall position of the activity centres of these townships in the hierarchy.

32. Clause 21.07-3 also includes objective 1, which seeks “to strengthen the hierarchy of activity centres on the Mornington Peninsula shown on the map to this clause and in Table 1 to this clause”. Strategies to achieve this are:

 Encourage additional retail premises (not including restricted retail premises), service stations and office developments to locate in Major Activity Centres and Large Township Activity Centres. Ensure the extent of additional commercial floor area for individual activity centres is commensurate with their role and function within the hierarchy.  Encourage restricted retail premises to locate in clusters on the edge of townships with Major Activity Centres.  Strongly discourage retail, restricted retail, service station and office developments from locating in out-of-centre residential, industrial and nonurban locations.

33. Clause 21.07-4 deals with Industrial area. Objective 1 seeks “to facilitate the expansion of existing industries and to attract new industries that provide services to the Peninsula community, contribute to the local employment base and that are compatible with the Peninsula’s character and environment”. Strategies to achieve this objective are:

 Ensure that adequate areas are available in appropriate locations for a range of industrial development.  Provide areas for industrial development on the basis of current and anticipated demand, where possible in locations that provide separation from major residential and commercial areas and do not generate industrial through traffic on residential roads. The area of industrial land should be in proportion to the anticipated population growth of the township, unless other factors are identified.  Retain larger areas of industrial land as a resource to provide opportunities for a wider range of manufacturing activities.  Encourage the redevelopment of older and under utilised industrial sites in a way which makes effective use of available infrastructure and improves the amenity of adjoining areas.  Protect industrial areas from encroachment by incompatible uses that may limit future opportunities.  Support retail or office activity in industrial areas only if: o It is ancillary to an industrial use on the same site (such as manufacturing sales). o It is intended primarily to provide services to the industrial area (such as food premises or industry supplies). o It consists of restricted retail premises, which require large display and storage areas, and where it is shown that the use cannot be reasonably located in existing commercial activity centres. Local Planning Policies 34. Clause 22.01 – Industrial Areas states that “the Municipal Strategic Statement also aims to strengthen the hierarchy of activity centres. It seeks to promote the growth of major and township activity centres and avoid inappropriate out-of-centre commercial development that may undermine the activity centres policy. This is particularly the case for out-of-centre bulky goods retailing along main roads. Commercial development also has the potential to restrict the availability of land needed to facilitate industrial business and employment opportunities, as well as a range of service industries”.

35. This policy includes an objective “to prevent out-of-centre commercial developments in the industrial zones that undermine the activity centres policy at Clause 22.02, particularly along main roads”, supported by policy that “proposals for out-of-centre commercial developments that undermine the activity centres policy at Clause 22.02 will not be supported”.

36. Clause 22.02 – Activity Centres includes objectives:

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 To ensure that the provision of additional commercial development strengthens the hierarchy of activity centres on the Mornington Peninsula shown on the map to Clause 21.07-3 and in Table 1 to Clause 21.07-3.  To facilitate the provision of additional retail (excluding restricted retail) and office floor space in major and township activity centres.

With policy to:

 Encourage retail premises (excluding restricted retail premises) in a Business 1 Zone in Major and Large Township Activity Centres that facilitate achieving the additional retail floor area envisaged by 2021.  Oppose retail, restricted retail or office developments that would cause a change to the classification of any activity centre within the hierarchy of activity centres as shown on the map and in Table 1 to Clause 21.07-3.

37. Directions for Commercial Growth states that:

The State Planning Policy Framework favours a compact development pattern for the metropolitan area. It encourages new commercial development to focus on activity centres that are best able to cope with change.

The Strategic Framework Plan forming part of Clause 21.04 seeks a compact development pattern for the Mornington Peninsula. Population growth is to be contained within the Peninsula’s main townships. To support this compact development pattern, commercial growth should be directed in a way that strengthens the hierarchy of activity centres on the Peninsula.

There is no need for any new major, township or local activity centre on the Peninsula in addition to the activity centres shown in Table 1 to this clause and on the map to this clause.

Directing additional commercial development to Major and Large Township Activity Centres will not only support a compact development pattern on the Peninsula. It will also facilitate a high level of service to the community. It will enhance the role of activity centres as the focus for community life. Concentrating a broad range of activities in Major and Large Township Activity Centres generates multiplier effects and contributes to the ‘critical-mass’ for business and employment opportunities. It provides certainty needed for investment decisions for commercial development. It will also protect the smaller centres from inappropriate levels of commercial development.

Out-of-centre retail, service station and office developments detract from compact urban patterns. This is detrimental to the established hierarchy of centres and should be avoided.

Bulky goods retailing (restricted retail premises and trade supplies) has experienced strong growth in recent years. This type of retailing is best provided in clusters developed for that purpose, as opposed to being located inefficiently in dispersed locations on industrial land along main roads or in other out-of-centre locations. The land area and vehicular access requirements of these clusters make them unsuitable for a location in the heart of activity centres. These clusters should be directed to the edge of the three townships with major activity centres on the Peninsula. There they contribute to the overall position of the activity centres of these townships in the hierarchy.

Reference Documents

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38. Activities Centres Strategy includes the following statements:

A trend in the large-format retailing sector is the clustering of retailers into ‘homemaker centres’. Large-format retailers, and thus homemaker centres, predominantly locate outside of traditional activity centres due to their need for large land parcels. When appropriately located, homemaker centres can complement the successful operation of the activity centre hierarchy, strengthening the overall attraction of an area and avoiding the problem of fitting new (and potentially disruptive) forms of development with high floor area and parking demands, into established and traditional street- based commercial areas. However, there is a risk that major out-of-centre locations may extend their range of functions to include the smaller-scale specialty retailing, which is a distinctive feature of traditional town centres, potentially undermining the attraction and performance of these centres. P14/15

It is possible that applications for retail or commercial development in the C2Z or IN3Z could impact on the activity centres hierarchy. For this reason, careful consideration is required of possible retail and commercial development in the C2Z and IN3Z, and the implications of such use and development for the existing activity centres. P23

While the benefit to the community of increased competition must be considered, and this is a key argument for ‘out-of-centre’ development proposals, this must be weighed against the benefits of maintaining viable, attractive and diverse town centres. P25

Council will only consider the creation of significant out-of-centre retail development where there is a demonstrated service gap which cannot be met by existing centres and/or where it is part of a new integrated neighbourhood development.

Proposals for new centres must demonstrate that they will not undermine the balance of the activity centres hierarchy and will provide clear net community benefit. P74

Incorporate into the activity centre policy appropriate reference to large format and mixed business/commercial uses operating outside of the township activity centres. Indicate that these activities and locations are supported to the extent that they complement the activity centres and the broader objectives of the activity centre strategy. P76

39. Industrial Centres Strategy includes the following statements:

In summary, while the establishment of businesses which would be difficult to integrate within existing town centres may be appropriate in some areas zoned for industrial use, it is important to avoid retail clusters or strip development along main roads, effectively establishing new ‘out of centre’ retail activity centres. P18

The Peninsula Homemaker Centre and an adjacent Bunnings store occupy approximately 13ha of land on the corner of Bungower Road and the Nepean Highway. An ALDI store and some additional food retailing have recently been constructed at the homemaker centre and in direct response to the recent planning zone reform process (see Chapter 1). P27/28

In practical terms, the Mornington North industrial precinct does not function as an industrial area given the business and land use mix. With direct exposure to the Nepean Highway, the precinct is characterised by a high share of restricted retail and commercial businesses which, in part, rely on highway frontage to generate customer traffic.

The application of the C2Z to this area is an option that may potentially be considered by Council in the future having regard to the current land use pattern. A rezoning to the C2Z could reduce the pressure for retail and commercial development in the Mornington-Tyabb Road industrial precinct, noting that a Development Plan Overlay exists to ensure a high standard of presentation in this highly-exposed location

Alternatively, in view of the limited opportunities to increase IN3Z land supply in Mornington, the BATA site could be retained in IN3Z to provide a specific future opportunity, e.g. for factory-based use, and to avoid pressure for further major out-of-centre retail development.

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Any detailed zoning changes (if any) should be determined subject to further site specific analysis and policy review, at Council’s own discretion. P65/66

40. Planning Scheme Amendment VC100 was gazetted on 15 July 2013. It sought to “support business investment and industry by responding to new and emerging trends regarding the mix of industry, office and some forms of limited retail, and provide greater incentive for business investment” (Reformed Zones for Victoria Improved Industrial Zones Fact Sheet, July 2013).

41. As part of the reforms, small scale supermarkets (up to 1800 square metres) and associated shops (up to 500sqm) were allowed within the Industrial 3 Zone, but shop use of any greater size remained prohibited.

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THE PROPOSAL 42. Kaufland is a German-based grocery chain which is looking to enter the Australian market, initially in six sites throughout Metropolitan Melbourne. The Minister for Planning has requested that an Advisory Committee review these six sites and provide advice on their acceptability from a strategic and amenity perspective, including the form of the control which would be implemented to achieve the use and development of these sites.

43. It is proposed to facilitate the development of a Kaufland supermarket (and additional uses) on this site through changes to the planning scheme as follows:

 Apply the Specific Controls Overlay to the above land and update the schedule to the Specific Controls Overlay accordingly.

 List the proposed “Kaufland supermarket development, 1158 Nepean Highway, Mornington incorporated document in the schedule to clause 45.12 and clause 72.04 as an incorporated document to the Mornington Planning Scheme.

44. The incorporated document acts to override the current planning scheme provisions for use, development and signage for a supermarket (and associated bottle shop) carried out by or on behalf of Kaufland, as well as a range of other commercial uses, being:

 Bank;

 Electoral Office;

 Medical Centre;

 Real Estate Agency;

 Travel Agency;

 Art Gallery;

 Food and Drink Premises except for hotel or tavern;

 Postal Agency;

 Shop except for adult sex product shop; department store; laundromat; restricted retail premises (other than party supplies); and

 party supplies.

45. The use and development must be undertaken generally in accordance with plans which show:

 a Kaufland supermarket and associated retail and food and drink stores (totalling approximately 7,500sqm);

 at-grade and undercroft car parking; and

 associated signage.

46. The conditions included within the Incorporated Document allow for variations to these plans with the written consent of the Minister for Planning.

47. The current zone provisions on an Industrial 3 zone allow for a Restricted Retail use to be applied for under that zone, and a supermarket of up to 1,800sq m with up to 500 sq m of shop is allowed as of right.

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PLANNING CONSIDERATIONS OVERVIEW 48. The proposal seeks the implementation of a planning control which would allow for a Kaufland supermarket as well as a range of additional uses totalling (currently) in excess of 7500 square metres of retail floor space. This would create a significant core retail node at the northern end of the Mornington Homemaker centre that is likely to alter the nature of this precinct to one that competes with, rather than complements the Mornington Major Activity Centre. This is a significant change that needs to be considered in the assessment of the proposal.

49. I acknowledge the importance of a robust and competitive retail market and the economic benefits that the introduction of Kaufland stores in Melbourne would deliver.

50. It is important, however, that the proposed location of Kaufland stores are assessed in regard to their consistency with the strategic direction provided by the planning policy framework. In this instance, the proposed location is likely to impact the basis for strategic decision making and investment decisions, and will be a negative impact in regard to net community benefit considerations.

51. The site’s location in an industrially zoned area which has evolved into a homemaker centre and outside the core retail area of the Mornington activity centre, would result in a number of challenges for the future of the Mornington Activity centre and the implementation of policy, given that it will compete with rather than complement it.

52. I also consider that the implementation of a planning control which allows for broad retail use and development opportunities has the potential to exacerbate the site’s role in altering the focus of the precinct. It will create a significant core retail node that provides for everyday convenience retailing, which can evolve over time. It sets up an approval for a substantial node, and a broader precinct, that competes directly with the Mornington Major Activity Centre and undermines policy direction for the agglomeration of activities in and around designated centres, creating a directly competing precinct within 2km of the designated centre.

53. The location of this Kaufland store should not be supported in light of the above.

54. I expand on my view of these matters below, with particular reference to the proposal’s compliance with the Municipal Planning Strategy and the Planning Policy Framework, and the form of the proposed control. IS THE PROPOSAL SUPPORTED BY THE MUNICIPAL PLANNING STRATEGY AND PLANNING POLICY FRAMEWORK? 55. The Planning Policy Framework provides direction on a broad range of issues, including (relevantly) the preferred location for different use types, the protection of amenity and direction on building form. Given the site location, abuttals and building design, I generally consider that the amenity of surrounding properties can be appropriately protected by the proposed controls, and the building form could sit comfortably within its setting, consistent with the relevant policy.

56. The site location, however, does not enjoy the same level of policy support, and in my view would have a significant impact on future investment decisions in regard to location of uses that would typically be directed to the core area of Activity Centres.

57. The site is zoned Industrial 3, the relevant purposes of which are

 To provide for industries and associated uses in specific areas where special consideration of the nature and impacts of industrial uses is required or to avoid inter-industry conflict.

 To allow limited retail opportunities including convenience shops, small scale supermarkets and associated shops in appropriate locations.

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58. The allowance within the zone for a limited range of retail uses, including small supermarkets, occurred in 2013 as a part of Amendment VC100. However, such uses are only allowed in specific circumstances and with limited size. Beyond this, they are prohibited. The allowance for such use types is therefore restricted to small amounts, which are more likely to serve a limited convenience function that would complement rather than compete with designated activity centres.

59. The direction provided by the zone is guided and reinforced by both State level policies at clauses 11 and 17 and local policies at Clauses 21.07, 22.01 and 22.02 which generally seek to concentrate retail uses within, or immediately adjacent to, activity centres. The reason for this is further explained within Clause 21.07 which states that:

Out-of-centre retail, service station and office developments detract from compact urban patterns. This is detrimental to the established hierarchy of centres and should be avoided.

60. Equally, policy seeks to protect industrially zoned land to ensure it remains available for its primary purpose.

61. While not yet included within the planning scheme, I note that Council’s current thinking on the distribution of land uses throughout the Mornington Peninsula is represented by the Activities Centres Strategy. These provide a more detailed strategic analysis of the Industrial 3 zoned precinct within which the site sits, stating that:

A trend in the large-format retailing sector is the clustering of retailers into ‘homemaker centres’. Large-format retailers, and thus homemaker centres, predominantly locate outside of traditional activity centres due to their need for large land parcels. When appropriately located, homemaker centres can complement the successful operation of the activity centre hierarchy, strengthening the overall attraction of an area and avoiding the problem of fitting new (and potentially disruptive) forms of development with high floor area and parking demands, into established and traditional street-based commercial areas. However, there is a risk that major out-of-centre locations may extend their range of functions to include the smaller-scale specialty retailing, which is a distinctive feature of traditional town centres, potentially undermining the attraction and performance of these centres. P14/15

Proposals for new centres must demonstrate that they will not undermine the balance of the activity centres hierarchy and will provide clear net community benefit. P74

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62. It is clear that the evolution of the homemaker centre has already been of interest to Council and that there is a need to carefully consider the mix of uses which are allowed to ensure the centre remains complementary to, rather than competitive with, the Mornington Major Activity Centre. This is consistent with the clear policy direction that currently exists within the State and Local Planning Policies. However, the Activities Centres Strategy also acknowledges that proposals for new centres has the ability to occur, but directs that it must display a “clear net community benefit”. This is consistent with the direction at Clause 17.02-2S, which provides for variation to this policy direction in very particular circumstances, seeking to “ensure that out-of-centre proposals are only considered where the proposed use or development is of net benefit to the community in the region served by the proposal or provides small scale shopping opportunities that meet the needs of local residents and workers in convenient locations.”

63. I do not consider a large supermarket with additional retail uses (totalling in excess of 7,500sqm of floor area) to be a small scale shopping opportunity for the purpose of this statement. Therefore this proposal, which is out-of-centre, must be assessed against the test of whether it is “of net benefit to the community in the region served by the proposal”.

64. Net benefit requires consideration of both the benefits and the challenges of a proposal, and the weighing up of often competing interests. The extent of these benefits and challenges, and the weight which is to be given to each, is therefore central to the acceptability of this proposal. This consideration is part of the wider mix of considerations as to whether the proposal is acceptable.

65. I have reviewed the assessment of economic benefits and the economic impact on surrounding centres as set out by Dimasi and Co for the proponent, and note the anticipated benefit in the creation of additional choice in the supermarket sector, as well as additional employment, along with some impact on existing centres. I understand that Rhys Quick has been instructed by Rigby Cooke to provide Economic evidence in this matter and I would defer to his expertise in regard to the extent of these benefits and disbenefits.

66. However, what does not appear to have been provided in any of the material prepared on behalf of the proponent is an assessment of the challenges of the out-of-centre location in this circumstance. In particular, there has not been any strategic analysis provided as to what effect the increased offer of such a significant convenience retail node at the northern end of the evolving Mornington Homemaker Centre may have on the Mornington Major Activity Centre as the two centres evolve, and compete for tenants.

67. Council policy opposes the creation of additional activity centres and the more recently adopted Council direction in the Activities Centres Policy (while not yet included within the scheme) provides very specific guidance on this type of outcome and opposes it.

68. I consider that locating a Kaufland supermarket and the other potential uses at this out-of-centre location would create a significant retail node with the potential for future growth, particularly given the nature of land uses within the precinct immediately to its south. The challenges for this proposal include:

 The substantial size of the supermarket and other retail uses proposed, totalling in excess of 7,500sqm (noting that a standard full line supermarket is generally around 4,000sqm) adds a convenience food shopping focus that, when combined with the Aldi and a number of additional food offerings, as well as the restricted retail uses on the land to the south of the subject site, has the real potential to alter the focus of the homemaker centre such that it competes directly with the Mornington Major Activity Centre;

 The missed opportunity given the type of uses proposed, including a large supermarket, which could reinforce an existing activity centre;

 The lack of justification, including economic benefit, of the uses other than Kaufland supermarket being located in an out-of-centre location; and

 The lack of broader strategic assessment of the implications of the proposal for the future of the overall- Industrial 3 zoned land and how it may relate to the Mornington Major Activity Centre in the future.

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69. The benefits which could be gained in this out-of-centre location would equally be gained in an activity centre location, in fact they would be supported by additional benefits as set out in Clause 21.07, leading to a greater level of benefit. While I acknowledge that there are likely to be more limited site options within activity centres, I have seen no evidence that a more appropriate location in, or immediately surrounding an activity centre has been considered.

70. I also consider that the controls as written are too broad for a location such as this.

71. Overall I consider that, while economic benefits exist for the introduction of Kaufland stores, the absence of any detailed assessment of alternative location in or on the edge of activity centres, combined with the challenges/ issues referred to above leads me to the view that this location does not meet the net community benefit test. CONCLUSION 72. In conclusion:

 I acknowledge and accept that there are economic benefits to Kaufland’s entry into the Australian market.

 The economic benefits for the associated retail and other uses allowed under the Incorporated Document are not identified;

 The proposal is likely to alter the focus of the Mornington Homemakers centre, resulting in a precinct which competes with, rather than complements, the Mornington Major Activity Centre; and

 I therefore consider that the Kaufland Supermarket and additional uses on this site are not supported by policy and should not be approved.

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APPENDIX A: STATEMENT OF QUALIFICATIONS AND EXPERIENCE

Name and Address Brendan Rogers Director Urbis Pty Ltd Level 12, 120 Collins Street MELBOURNE VIC 3000

Qualifications . Bachelor of Town and Regional Planning . Graduate Diploma -Property

Professional Experience . Current Position: Director, Urbis Pty Ltd (joined firm in 1994) . 1989-1994: Associate Director, Wilson Sayer Core Pty Ltd . 1984-1989: Town Planner in local government – City of Melbourne & Cheltenham Borough Council (UK) . 1983-1984: Town Planner in state government – Department of Planning

Area of Expertise . Statutory and strategic planning on residential, commercial and industrial issues. . Consulting advice to a wide range of commercial and government clients addressing the management of urban development and the planning process. . Appearance as a planning expert witness in a variety of forums.

Expertise to Prepare this Report Professional qualifications and expertise in town planning both in the public and private sectors.

Instructions which defined the Scope of the Report I received instruction from Rigby Cooke lawyers. The details of these instructions are set out at Paragraph 3 of my evidence.

Facts, Matters and Assumptions Relied Upon I have relied upon the following in the preparation of this report: . the Mornington Peninsula Planning Scheme . the Advisory Committee materials as exhibited and amended . Ministerial Directions and Planning Practice Notes

Documents taken into Account Relevant documents are described above.

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Identity of Persons undertaking the work Brendan Rogers with assistance from Tarquin Leaver, Associate Director of Urbis.

Relationship with Vicinity Centres I note that I provide planning advice to Vicinity on their range of assets.

Summary of Opinions A summary of my opinions in relation to this matter is included at the conclusion of my evidence.

I have made all the inquiries that I believe are desirable and appropriate and no matters of significance which I regard as relevant have to my knowledge been withheld from the Panel.

Brendan Rogers Urbis Pty Ltd

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