Council (Development) 12 September 2016 Item 8.4 …...Council (Development) 12 September 2016 Item...

Council (Development) 12 September 2016 Item 8.4

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ECONOMY

ITEM NUMBER 8.4

SUBJECT Assessment of Draft DCP & Draft VPA: Land on the corner of Parramatta Road, Good Street and Cowper Street, Granville

REFERENCE RZ/27/2014 - D04376453

REPORT OF Project Officer - Land Use Planning APPLICANT: Airbosi Pty Ltd c/o Think Planning Pty Ltd LANDOWNER: Airbosi Pty Ltd PURPOSE: To seek Council’s endorsement of a Draft Development Control Plan (DCP) that accompanies a Planning Proposal that seeks to rezone the land on the corner of Parramatta Road, Good Street, and Cowper Street, Granville to B4 Mixed Use and increase the maximum permitted height and floor space ratio; and report on the outcome of the negotiations and final Voluntary Planning Agreement (VPA) offer received by Council in relation to the Planning Proposal for the subject site.

RECOMMENDATION

(a) That Council endorse the Draft Development Control Plan (DCP) prepared for land on the corner of Parramatta Road, Good Street and Cowper Street, Granville, as provided at Attachment 1, for the purpose of public exhibition.

(b) That the Draft DCP be placed on public exhibition concurrently with the Planning Proposal for the site for land on the corner of Parramatta Road, Good Street and Cowper Street, Granville for a minimum period of 28 days, and the outcome of the public exhibition be reported back to Council.

(c) That Council write to the applicant advising that the current VPA offer is not

accepted by Council as it is considered that the value of the offer is not sufficient in addressing the future infrastructure demands and other needs of the community as identified in the Draft Parramatta Road Urban Transformation Strategy.

(d) That Council authorise the Interim General Manager to continue the Draft

VPA negotiation process and endorse the final agreement if it achieves, in his opinion, infrastructure provision commensurate with the additional community needs arising from development under the Draft Parramatta Road Urban Transformation Strategy.

(e) That Council authorise the Interim General Manager to finalise the drafting of

the VPA for the purposes of public exhibition which may occur separately from the exhibition of the Planning Proposal and Draft DCP discussed above.

(f) Further, that Council authorise the Interim General Manager to correct any

minor policy inconsistencies and any anomalies of an administrative nature relating to the Planning Proposal, Draft DCP and VPA documentation that


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may arise during the amendment processes.

THE SITE

1. The subject site is located on the southern side of Parramatta Road,

approximately 140 metres from the Granville Transport Interchange and Granville Town Centre. The Western Railway Line is located to the south of the site and the M4 Motorway is located to the far north of the site as shown within Figure 1.

Figure 1 – Location Map

2. The site has a total area of approximately 5,150m2 and consists of fifteen (15)

lots. The land (as outlined in red in Figure 2) currently accommodates a mixture of one and two storey commercial buildings, a single detached dwelling, a car sales yard, visitor car parking, and vacant lots.

Figure 2 – Aerial Site Map


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3. The lots fronting Parramatta Road are adjacent to a petrol station. The lots fronting Cowper Street are adjacent to a large lot where construction is currently underway on a mixed use development to deliver a 9 storey building with a total of 68 units (DA/683/2014). The lots fronting Good Street are opposite a mixture of one and two storey buildings occupied by commercial and retail uses.

4. The site includes Heritage Item 157 – The Barn which fronts Parramatta Road

and is an iconic building in Granville. This is outlined in yellow in Figure 2. BACKGROUND

5. A Planning Proposal for the land on the corner of Parramatta Road, Good Street, and Cowper Street, Granville was lodged with Council on 23 December 2014 on behalf of the landowner seeking to rezone the site to B4 Mixed Use (to allow residential uses) and to increase the maximum building height and FSR controls.

6. The proposal was revised and amended by the applicant prior to its consideration by Council to take into account the strategic planning work undertaken to date by UrbanGrowth NSW as part of the preparation of the Parramatta Road Urban Transformation Strategy (Draft Strategy), and in light of feedback from the Department of Planning and Environment in relation to another Planning Proposal seeking changes to the land use and built form controls within the North Granville Precinct. The report considered by Council when it resolved to proceed with the rezoning sets out the background in detail and is included as Attachment 2.

7. Council at its meeting on 10 August 2015 considered a report on the Planning

Proposal for the subject site and resolved the following: (a) That Council endorse the Planning Proposal provided in Attachment 1 for

the land on the corner of Parramatta Road, Good Street and Cowper Street, Granville allowing a maximum FSR of 5.22:1 and building height of 96.6m (approximately 30 storeys), which equates to 6:1 and 111m (approximately 34 storeys) including the bonuses for design excellence, and forward it to the Department of Planning and Environment for Gateway determination.

(b) That Council proceed with negotiations for a Voluntary Planning Agreement (VPA) with the landowner in relation to the Planning Proposal.

(c) That delegated authority be given to the CEO to negotiate the VPA on behalf of Council and that the outcome of negotiations be reported back to Council prior to its public exhibition.

(d) That Council consider a further report on the Site Specific DCP for the subject site prior to its public exhibition.

(e) That Council advises the Department of Planning and Environment that the CEO will be exercising the plan-making delegations for this Planning Proposal as authorised by Council on 26 November 2012.


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(f) Further, that Council authorise the CEO to correct any minor anomalies of a non-policy and administrative nature that may arise during the plan- amendment process.

PLANNING PROPOSAL AND STRATEGIC PLANNING CONTEXT

8. The endorsed Planning Proposal was forwarded to the Department of Planning and Environment (the Department) requesting a Gateway Determination on 13 August 2015. As reported, the Planning Proposal sought the following changes to the Parramatta LEP 2011:

Rezone the land from part B2 Local Centre and part B6 Enterprise Corridor to B4 Mixed Use.

Increase the Maximum Height of Buildings from 15 metres and 21 metres to 96.6 metres (approximately 30 storeys).

Increase the Maximum Floor Space Ratio from 2:1, 3:1, and 3.5:1 to 5.22:1.

Introduce a Design Excellence Clause to require the site to undertake a design excellence competition, with the winning scheme being awarded a 15% height and FSR bonus (i.e. resulting in a final building height of 111 metres (approximately 34 storeys) and final FSR of 6:1).

Introduce a Site Specific Clause requiring the provision of a minimum of 4,000 metres square of non-residential floorspace.

9. The Planning Proposal sought to deliver a mixed use development comprising

360 dwellings and 4000m2 of non-residential uses within a 34 storey tower. A pedestrian laneway was proposed to extend from Parramatta Road through the site down to Cowper Street, running parallel with Good Street.

10. In September 2015 UrbanGrowth NSW placed the Draft Parramatta Road Urban Transformation Strategy (The Draft Strategy) on public exhibition. The Draft Strategy provides a Draft Structure Plan and Built Form Plan for the Granville North Precinct (where the subject site is located) and recommends a mixed use precinct with development ranging in height from 14 storeys to 25 storeys (82m). Specific zoning, height and floor space ratio controls were not released at that point in time.

11. A Gateway Determination was issued in early November 2015 advising Council

that the Planning Proposal should proceed subject to a number of conditions (Attachment 3). One of the conditions required the Planning Proposal to be amended to ensure consistency with the recommendations of the Draft Strategy prepared by UrbanGrowth NSW and its associated Urban Design Guidelines.

12. In response to the Gateway Determination, the applicant has since revised the

Planning Proposal and submitted an alternative design scheme which addresses the recommendations of the Draft Strategy by reducing the building height to a maximum of 25 storeys and applying (with some minor variation) the setbacks and built form controls prescribed by the Urban Design Guidelines. As a result, the applicant has retained an FSR of 6:1, with the GFA now being distributed within two connected towers (25 storeys and 16 storeys in height) as opposed to one tower (34 storeys in height) in the original scheme.


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13. Following the amendments made to comply with the conditions of the Gateway Determination (Attachment 3), the revised Planning Proposal seeks the following changes to the Parramatta LEP 2011:

Rezone the land from part B2 Local Centre and part B6 Enterprise Corridor to B4 Mixed Use.

Increase the maximum Height of Building control from 15m and 21m to 82m (25 storeys)

Increase the maximum Floor Space Ratio control from 2:1, 3:1 and 3.5:1 to 6:1

Introduce a Design Excellence Clause to require the site to undertake a design excellence competition, with the winning scheme not receiving a height and FSR bonus.

Introduce a Site Specific Clause requiring the provision of a maximum of 4,000m2 of non-residential floorspace.

14. The Draft Site Specific Development Control Plan (DCP) and Draft Voluntary

Planning Agreement (VPA) have been informed by the content of the revised Planning Proposal and revised design concept.

DRAFT DEVELOPMENT CONTROL PLAN

15. A Draft Development Control Plan (DCP) was prepared by the applicant and first lodged with Council on 10 May 2016. Council Officers have worked with the applicant to make amendments as appropriate with the final Draft DCP being lodged with Council on 15 August 2016. The Draft DCP is provided at Attachment 1, and provides controls to guide the built form on the land including indicative building envelopes, setbacks, height of podiums, through links, public domain, and the management of the existing heritage item. Figure 3 includes the built form diagram which shows the desired massing for the subject site.

Figure 3 – Built Form and Massing Diagram


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16. Once a Site Specific DCP is endorsed for the site it will become one of the

policies that will guide the preparation and assessment of any future development application for the site, in conjunction with the general controls provided in PLEP 2011, the broader controls in Parramatta DCP 2011, as well as any other relevant legislation and guidelines.

17. The Draft DCP was informed by the revised Planning Proposal and accompanying reference design. As discussed above under the section of this report titled ‘Planning Proposal and Strategic Planning Context’, the reference design for the subject site was prepared to align with the Draft Parramatta Road Urban Transformation Strategy and its accompanying Urban Design Guidelines.

18. Officers are satisfied that the revised scheme complies with the vision, principles, and structure plan of the Draft Parramatta Road Strategy and delivers the built form outcome the urban design guidelines were intended to achieve. Whilst there are some minor technical inconsistencies between the revised scheme and the Draft Parramatta Road Strategy, these in general are supported by Council staff as the scheme is consistent with the objectives of the Draft Parramatta Road Strategy despite the minor non-compliances. These include a variation to the recommended maximum floor plate size, podium to tower setbacks on Parramatta Road, and the setback to the local street.

Apartment Design Guidelines – SEPP 65

19. During the assessment of the Draft DCP by Council Officers, consideration was

made to the Apartment Design Guidelines (ADG) prescribed by SEPP 65. This was to ensure the built form complies with these requirements, as an assessment against the ADG will form part of any future development application.

20. Officers determined that the proposed built form generates a small number of

ADG compliance issues. In particular concerns were raised in relation to privacy and building separation at the internal corner of the tower buildings. Furthermore, three units identified within the scheme that are orientated to the laneway underneath the tower are not considered to achieve sufficient amenity or daylight access. However Council Officers consider that these issues can be resolved as part of the future Design Excellence Competition process required as part of the Planning Proposal.

Design Excellence Competition 21. The Planning Proposal introduces a Design Excellence Competition process to

ensure that the development achieves best practice architecture, urban design and sustainability measures. A Design Competition will ensure a high quality built form outcome is delivered on the site and within the North Granville Precinct as identified within the Draft Parramatta Road Strategy. This is important due to the amenity issues resulting from the site’s close proximity to Parramatta Road, and the need to mitigate these issues through the design process.

22. The Design Competition brief will require compliance with the Draft DCP and the

Apartment Design Guidelines. During the preparation of the brief, Council


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Officers will also have the opportunity to propose any other additional design considerations deemed necessary to manage built form on the subject site.

23. It is recommended that Council endorse the Draft DCP prepared for the land on

the corner of Parramatta Road, Good Street and Cowper Street, Granville, as provided at Attachment 1 to proceed to public exhibition. The draft DCP delivers a built form outcome that achieves the vision and objectives of the Parramatta Road Urban Transformation Strategy and its Urban Design Guidelines and is therefore considered to be consistent with the Department’s Gateway Determination.

DRAFT VOLUNTARY PLANNING AGREEMENT

24. On 10 August 2015 Council resolved to proceed with negotiations for a Voluntary Planning Agreement (VPA) with the land owner in relation to the planning proposal. A chronology of the key dates associated with the negotiation of the VPA are summarised in Attachment 4.

25. The final VPA offer is included below under the section of this report titled ‘Final Voluntary Planning Agreement Offer’.

PLANNING AGREEMENT POLICY FRAMEWORK

26. A planning agreement can be made under section 93F of the Environmental

Planning and Assessment Act 1979 (the Act) and is a voluntary agreement between Council and the developer, under which the developer is required to dedicate land free of cost, pay a monetary contribution or provide other material public benefit, or any combination of these, to be used towards a public purpose. This may be in lieu of a s94 or s94A development contribution, as a part substitution or an additional benefit.

27. The Act specifies that a public purpose includes the provision of public amenities or public services, the provision of affordable housing, the provision of transport or other infrastructure relating to the land, the funding of recurrent expenditure relating to any of these, the monitoring of the planning impacts of a development and the conservation or enhancement of the natural environment.

Current Policy Framework

28. In 2008, Council adopted the Planning Agreements Policy (prepared by Connell Wagner) which sets out the principles for managing planning agreements, matters that Council must consider in negotiating agreements, the steps in the negotiating process, public probity, notification requirements and implementation. The policy was prepared in line with requirements of the EP& A Act 1979 and associated Regulations which set out the legal and procedural framework for planning agreements.

29. The negotiation of a planning agreement is at Council’s discretion. Key principles of Council’s policy are that:

planning decisions will not be bought or sold through planning agreements;

development that is unacceptable on planning grounds will not be permitted because of the benefits of a planning agreement;


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the benefits of the planning agreement will bear a relationship to the application;

Council will not give undue weight to a planning agreement when making a decision on a development application; and

Council will not improperly rely on its position in order to extract unreasonable public benefits under planning agreements.

30. Procedurally, Council’s policy requires:

a Council resolution to undertake negotiations on a planning agreement;

appointment of a Council officer with delegated authority to negotiate a planning agreement on behalf of Council (this is not to be an officer with a key responsibility for the development application);

consideration of whether an independent person is required to facilitate the negotiations;

public exhibition of the draft agreement, once prepared; and

the elected Council will ultimately make the decision as to whether to approve the planning agreement.

31. However the policy framework guiding the assessment and negotiation process

of VPAs is currently under review. Council resolutions and reports addressing Council’s Planning Agreement Policy Framework for managing agreements within the Parramatta CBD; the Parramatta CBD Planning Strategy; and the Parramatta CBD Infrastructure Funding Review Committee outcomes since December last year have resulted in a peer review being initiated which together with future consultation with stakeholders will guide Council policy framework in this area.

32. It should also be noted that in Council’s submission to the Draft Parramatta Road Strategy Council resolved to include a request that as part of the preparation and implementation of the strategy that some form of Value Sharing Mechanism be put in place to assist with funding infrastructure along the entire Parramatta Road corridor. “Council considers existing s94a development contributions will not be sufficient to implement the required facilities, and an alternative funding mechanism is required in recognition of the substantial increase in residential densities within the urban renewal precinct”.

Council’s Current VPA Negotiation Process

33. Council’s well established practice for processing VPA’s requires a land

valuation report to be prepared by a registered property valuer. The land valuation report is required to detail the land value under current controls and also the improved land value under the Planning Proposal.

34. Council Officers would then review the report and verify the values which have been provided. Following verification by Council officers, the difference in these two land values will be determined as the ‘uplift value’ being sought.

35. The practice to date has been that Council Officers would negotiate with the

starting position that the value of items in the VPA should be equivalent to 50% of the value uplift arising from the change in the planning controls. Council Officers have been seeking to formalise a policy position with details of this process discussed in the next section of this report.


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36. A contribution of the ‘uplift value’ can consist of a number of items (including a monetary contribution or capital works) which is resolved via negotiation between Council and the applicant. The agreed items will then be delivered through a Voluntary Planning Agreement.

37. A report to Council on 27 June 2016 advised Council of the key outcomes of the

Parramatta CBD Infrastructure Funding Review Committee meeting held on 1 March 2016 on value sharing policy framework and of further analysis which has been undertaken since that meeting (details within Attachment 5). Council in response to this report is undertaking additional work including a peer review to continue with the process of developing its value sharing policy framework. In the interim this report has been assessed using the same methodology applied to assessments of VPA offers prior to 27 June 2016.

FINAL VOLUNTARY PLANNING AGREEMENT OFFER

38. The final VPA offer and the subsequent letter in support of their offer (Attachment 6 and 8) provided by the landowner for the land on the corner of Parramatta Road, Good Street, Cowper Street, Granville in relation to the associated Planning Proposal is as follows:

Land dedication o Setbacks to Parramatta Road, Good Street, Cowper Street o Pedestrian laneway between Cowper Street and Parramatta

Road o Vehicular laneway from Cowper to Bold Streets.

Monetary contribution of $300,000 to be used for community facilities within the area.

Provision of two (2) two bedroom dwellings within the proposed development for the purposes of affordable housing.

39. The VPA offer is made in addition to the Section 94A contributions applicable to the proposed future development.

ASSESSMENT OF FINAL VOLUNTARY PLANNING AGREEMENT OFFER

40. The final VPA offer has been assessed utilising Council’s current process

detailed earlier in this report, and within the parameters of the Environmental Planning and Assessment Act and Regulations.

41. The following were considered in the assessment of the offer:

The likely uplift in land value as a result of the rezoning and increase in FSR;

An analysis of value uplift versus public benefit and whether the proportion of public benefit (contribution) proposed is acceptable and reasonable;

The appropriateness of delivering contributions/public benefit via a VPA when compared with what would ordinarily be required as part of development approval conditions of consent; and

A qualitative assessment of the nature and type of public benefits contained within the VPA offer.


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Land Dedication Setbacks

42. The land within the setbacks proposed to be dedicated to Council are the

setback areas required to comply with the Draft Parramatta Road Urban Transformation Strategy Urban Design Guidelines. These guidelines require a 6m setback from Parramatta Road to manage the impacts from high traffic levels from Parramatta Road on pedestrians and occupants of the buildings and to provide a suitable public domain to improve the character and amenity of land fronting Parramatta Road. This is also required to provide space for the tree lined boulevard treatment which is the vision of the Draft Parramatta Road Strategy.

43. In most cases this setback area would be provided and retained in private ownership. However, the applicant has indicated that they would like to dedicate this to Council as a potential public benefit. The area of land in question is 411sqm.

44. Taking this land into Council ownership will set a precedent as other landowners

may seek to also dedicate this land. One critical issue if Council accepts this offer is that Council will become responsible for the cost of on-going care and management of this land.

45. Councillors have previously provided a direction on how these issues should be

managed. On 23 December 2015 Council resolved that VPA’s should not incorporate any infrastructure that might reasonably be delivered as a condition of consent. The relevant portion of the resolution is Part (d) of the resolution detailed below:

(a) That Council review its policy on Voluntary Planning Agreements, to:-

- identify the key projects that should be supported by public benefits to be delivered via VPAs;

- how this contribution should be delivered; and - recognise that value sharing is an appropriate approach for

determining the value of a VPA contribution. (b) That while the review of the Policy is being undertaken, all VPAs

associated with development proposals in the CBD, should seek to deliver public benefit contributions for the River Foreshore Strategy and associated projects, Council’s major improvement projects , upgrades and delivery of new public domain and open spaces in the CBD, with a preference for River Foreshore Strategy projects.

(c) That in accordance with the current policy all VPAs be referred to

Council for consideration of the initial offer and approval of the final offer. (d) Further, that any upgrade or improvement surrounding a new

development site be required as conditions of development consent e.g. pedestrian link, road way and new footpath.

46. As part of the negotiations the applicant put forward an argument that these

setback areas could be dedicated to Council as part of the VPA but that they


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should be valued as if Council was acquiring the land at its full value. Council Officers were unable to agree to this position as this would essentially see the applicant obtain the benefit of generating FSR from the land and then have Council acquire (or credit) the land at full value through the VPA process. As part of negotiation process Council Officers did discuss the option of valuing the land to be dedicated as if the land was being acquired for open space but this approach was not accepted by the applicant.

47. Given the reasons above, including Council’s resolution on 23 December 2015, Council Officers are not able to support the inclusion of this land in any VPA.

Pedestrian Link Running North South through the Site

48. The proposed pedestrian laneway provides access through the site from Parramatta Road to Cowper Street, running parallel with Good Street. Whilst Council Officers acknowledge this improves the level of permeability through the North Granville Precinct, the laneway is not identified within the Parramatta DCP 2011 as a required connection due to the proximity of Good Street.

49. The pedestrian laneway included within the reference design for the subject site delivers achieves a well-considered built form outcome; manages the bulk and scale of the podium; and activates the ground floor and provides for retail uses consistent with the fine-grain retail nature of Good Street.

50. The inclusion of the laneway improves the amenity and design of the mixed-use

development. Whilst Officers acknowledge this offers a degree of public benefit, it is also considered to be delivered in the interest of the development scheme as it provides a private benefit to future tenants of the shops located on the ground floor by providing these tenancies with a shop front. Therefore it is not considered to be purposefully designed and dedicated for the interest of the wider community and should not have a significant value attributed to it within the VPA offer.

Vehicular Laneway

51. The land proposed to be embellished and dedicated to Council for the purposes of the vehicular laneway is a requirement of the PDCP 2011 and is required to provide vehicular access to the subject site to enable the development to occur. The provision of this laneway connection could potentially form part of a condition of consent associated with any future DA rather than a public benefit item as part of a VPA.

52. As part of the consideration of the Planning Proposal, Council has already agreed that the location and design of this laneway can differ from the specific location and arrangement shown in the PDCP 2011 in a way that minimises the amount of land needed for the laneway and which also allows the development to achieve a higher FSR than would be possible if the laneway was delivered in the location shown in the PDCP 2011.

53. The applicant proposed that the vehicular laneway be valued using the same

methodology as the land to be dedicated within the setbacks (i.e. using the full market rate). As the applicant is receiving GFA from this land, it is not appropriate to value this land at the full market rate. During the VPA negotiations this was discussed, and Officers proposed the option of valuing the


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land to be dedicated as if the land was being acquired for open space but this option was not accepted by the applicant.

Other Benefits Suggested by the Applicant

54. In addition, the offer refers to the retention and management of the heritage item ‘The Barn’ as also being a public benefit item to be included as part of the VPA. Council officers do not agree with this approach as the retention/integration and management of any heritage item would be a requirement as part of any future DA involving the redevelopment of a heritage item and therefore is not considered to be a VPA item.

Monetary Contribution

55. The provision of a monetary contribution ($300,000 has been offered by the applicant) towards the development of community facilities within and around the Granville precinct is considered appropriate and favourable in addressing the needs of the local community. This will accelerate the delivery of Council purposefully planned and designed community facilities within this respective area which will benefit the community.

Affordable Housing

56. The dedication of units for affordable housing is in line with Council’s adopted Affordable Housing Policy 2009 (which is currently being reviewed and updated). The Policy seeks to provide housing for both low to moderate income households as well as local key workers (especially those in the education, health care and medical research sectors) who are seeking affordable housing in close proximity to their place of work.

57. The proposed dedication of two (2) two bedroom units within the proposed development on the subject site is providing the dwelling type and configuration most commonly sought after by those in need of affordable rental housing. This will contribute positively to the community and provide a dwelling type to meet the current market demand.

58. Council Officers acknowledge that Part (b) of Council’s resolution from 23

December 2015 endorsed that VPAs associated with sites within the CBD only deliver contributions for Council’s major improvement projects, upgrades and delivery of new public domain and open spaces in the CBD, with a preference for River Foreshore Strategy projects. However as the land associated with the subject VPA is outside of the CBD, the delivery of affordable housing units through the VPA process is supported.

VALUE OF FINAL OFFER Quantitative Value

59. For the purpose of Council Officers’ analysis the only parts of the offer that Council Officers consider to offer public benefit and should be attributed a value are the affordable housing units and the contribution towards the community facilities.


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60. An assessment has been undertaken in relation to the total value of the VPA offer in comparison to the uplift value that will be achieved by the variation of the planning controls as per the Planning Proposal.

61. A Valuation Report was submitted by the landowner which quantifies the value of the land under the existing planning controls, and the value of the land under the revised planning controls sought within the Planning Proposal. This is to determine the likely uplift in land value as a result of the rezoning and increase in FSR, which would inform the value of the final VPA offer.

62. The conclusions of the Valuation Report were reviewed by Council Officers.

According to Council’s valuation methodology, Council Officers generally agree with the applicant’s calculated land value under the proposed planning controls (i.e. post Planning Proposal – B4 Mixed Use with an FSR of 6:1) however conclude that the applicant overvalued the land under the current controls (i.e. pre Planning Proposal – part B2 Local Centre with an FSR of 2:1, B6 Enterprise Corridor with an FSR of 3:1, and B4 Mixed Use with an FSR of 3.5:1). As a result there is a discrepancy between the applicant and Council’s calculated value uplift to result from the Planning Proposal. Details are disclosed within Attachment 7, which is a confidential memo which contains information which is commercial in confidence.

63. Due to the wide discrepancy between the applicant and Council’s value uplift, a

midpoint was taken to proceed with the negotiations of the VPA offer and value. As discussed earlier in this report Council practice to date has been that Council Officers aim to negotiate a VPA offer which captures 50% of the value uplift generated by the Planning Proposal.

64. Using the midpoint in value uplift, Council Officers have calculated that the final

offer in its current form captures 11% of the assigned value uplift. The 11% represents the total value of the two affordable housing units, the $300,000 monetary contribution for community facilities, and the land within the setbacks and laneway (valued using an open space land rate). The offer is not considered satisfactory. Details of the values assigned to each item, along with the valuation methodology, are included within confidential Attachment 7.

65. Officers recommend that the VPA offer not be accepted in its current form as

the offer does not deliver appropriate public benefit proportionate to the value uplift. This assessment has been put to the applicant and they have indicated that they would like the Council to consider other factors they consider impact on the extent of value sharing that is appropriate for this site.

Qualitative Value

66. The applicant has provided supplementary information (Attachment 8) to support the final VPA offer made to Council on 14 July 2016 which discusses the public benefits generated by the Planning Proposal which the applicant considers that Council Officers have not assigned an appropriate value to during the assessment of the VPA offer.

67. The applicant considers the value of the items below to extend beyond the quantitative amount as they consider these items to offer substantial qualitative public benefit.


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68. The applicant asserts that:

The VPA negotiations purpose is to deliver qualitative public benefits to the City of Parramatta. The Planning Proposal includes a number of inherent public benefits

The retention of a prominent heritage building façade and returns

The provision of an activated north south pedestrian through site link

The provision of Public Art

The dedication of land along the Parramatta Road frontage that will result in the improvement of the Parramatta Road corridor, desired by the State Government, Local Government, and the community alike

Urban renewal of an area through private initiative, rather than in response to Government policy, including improved activation of the northern gateway to the town centre

Completion of the laneway, long desired in Council’s DCP.

30% of the land area is publicly accessible.

69. Council Officers acknowledge the qualitative benefits the renewal of the site will have on Parramatta Road within the North Granville Precinct. However as discussed within this report under the title ‘Assessment of Final Voluntary Planning Agreement Offer’, the provision of the items within the above are considered to be standard development outcomes to result from a mixed use development that would normally be part of a public domain plan within a condition of consent for a development approval, and is therefore not considered a true public benefit to be delivered through a VPA.

APPLICANT RESPONSE TO COUNCIL OFFICERS’ ASSESSMENT

70. The applicant’s supplementary information (Attachment 8) submitted to Council

challenges the practice of capturing 50% of the value uplift for this VPA due to nature of the associated Planning Proposal. This letter includes the applicant’s position on the qualitative assessment issues discussed in the previous section of their report and makes the following additional arguments in support of the Draft VPA offer.

71. The applicant asserts that because the intention of the Planning Proposal is to

reconcile the existing three business zones (B2 Local Centre, B4 Mixed Use, and B6 Enterprise Corridor) which apply across the site by introducing a single B4 Mixed Use zoning, which is consistent with the policy position for the Granville Town Centre, the nature of the zoning change is not substantial.

72. Furthermore, as the existing B4 Mixed Use land which surrounds the subject

site already has an FSR of 6:1, the introduction of 6:1 on the subject site through the Planning Proposal is not a significant variation from the existing planning controls other landowners within the same precinct are currently able to develop under.

73. As a result, the applicant argues that seeking a VPA with a quantitative value of

50% of the value uplift of the land as a result of the Planning Proposal is not justified because the development yield generated by the proposal is already achievable by landowners within the adjoining North Granville Precinct.


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74. Council Officers note the applicant’s assertion that capturing 50% of the value uplift is not justified given the nature of the associated Planning Proposal. However the proposal will be introducing residential uses (which are currently not permitted on part of the site) and will deliver an increase in development density and value. This in turn will result in approximately 360 dwellings, which will significantly increase the residential population on the subject site and within the North Granville Precinct.

75. The VPA is to ensure that sufficient public benefit is delivered to help

accommodate the growth in population and the impact this increase will have on services and infrastructure within the adjoining areas of the Parramatta LGA.

76. It is noted that the Draft Parramatta Road Strategy identifies significant gaps in

infrastructure and services within the North Granville Precinct. For the area to accommodate the anticipated increase in population (approximately 7000 dwellings) contributions to support this population is required to ensure the viability of the area.

77. The Draft Strategy’s Open Space and Social Infrastructure Report identifies that

VPAs are a mechanism to deliver public benefit and recommends they (along with the other existing mechanisms for financing social infrastructure) are maximised to assist with the upgrade. Capturing an appropriate proportion of the value uplift to deliver public benefit to the current and future community is considered to be in keeping with the Draft Strategy.

78. Council’s submission made in response to the Draft Strategy at the end of 2015

noted that decisions to up-zone land will place significant pressure on the existing infrastructure, with upgrades not being able to be funded solely from development contributions levied under S94 of the Environmental Planning and Assessment Act 1979. Sharing the land value uplift from planning decisions between the developer and the community provides a valid funding source for the infrastructure needed by the increased development.

79. Requesting a VPA offer with a greater value and public benefit is consistent with

Council’s position on infrastructure funding in Granville, which was included within the submission forwarded to UrbanGrowth NSW in response to the Draft Strategy.

80. In addition, the applicant requests that Council consider the costs (included

within confidential Attachment 7) incurred by the landowner across the last 13 years to consolidate 15 allotments to deliver one large development parcel as part of the VPA calculations. The applicant argues that the delivery of one large development parcel enabled the design of a cohesive and well-considered development scheme for this land, located within the Granville Town Centre and that these costs should be recognised as the design and development benefits are also a benefit to the community as a result of the improved design outcome.

81. Officers acknowledge that the proposed built form enabled by the consolidation of the land will result in an improved built form outcome, however it is equally noted that the proposed increased FSR and height would not be possible under a fragmented approach or developing individual small lots. The result of consolidating the subject land delivers greater development potential for the landowner, who benefits from a significant increase in land value as a result of the Planning Proposal. In addition, the costs and associated risks encountered


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by the landowner during the acquisition of this land is a reality of the development industry, with which the landowner pursued voluntarily. Therefore the costs incurred to consolidate the land is not a factor considered by Council in the assessment of VPAs.

PUBLIC PURPOSE & PUBLIC BENEFIT

82. Notwithstanding the fact the total value of the proposed VPA offer is considered

to be unsatisfactory, some of the items proposed to be contributed are considered to be in public interest and benefit for the current and future community of Parramatta. As discussed above, a monetary contribution will accelerate the delivery of Council planned and designed community facilities; and the contribution to the affordable housing stock within the City of Parramatta will assist in supporting key workers and their families.

83. Council Officers may be willing to recognise some value for the more intangible benefits that the applicant has proposed. However, the gap between the applicants offer, which when assessed by Council Officers represent 11% of value uplift, and the 50% of value uplift target (which is the negotiating position that has been used in negotiations to date across the LGA ) is too great for intangible benefits to be considered sufficient enough to bridge the gap between the offer and the stated negotiating position.

POTENTIAL IMPLICATIONS OF NOT ACCEPTING THE CURRENT OFFER

84. Staff recommend that the VPA offer not be accepted in its current form as the offer as it stands does not deliver appropriate public benefit proportionate to the value uplift.

Advantages Greater Public Benefit

85. The offer as it stands does not deliver sufficient public benefit. Renegotiating to receive an offer closer to 50% of the value uplift of the land will ensure that a significantly greater amount of public benefit will be delivered through this VPA which will assist with addressing the infrastructure constraints within North Granville.

86. As discussed above within this report under the title ‘Applicant Response to Council Officer Assessment’, Council has acknowledged that the upzoning of land within the North Granville Precinct as proposed under the Draft Parramatta Road Strategy will place significant pressure on the existing infrastructure within the area. To ensure that the precinct can accommodate the amount of expected growth (approximately 7000 dwellings) capturing sufficient public benefit through VPAs to successfully revitalise the precinct to ensure its functionality and liveability for the current and future community is necessary.

87. Sharing the land value uplift from planning decisions between the developer and

the community provides a valid funding source for the infrastructure needed by the increased development. Requesting a VPA offer with a greater value and public benefit is consistent with Council’s position on infrastructure funding in Granville, which was included within the submission forwarded to UrbanGrowth NSW in response to the Draft Strategy.


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Precedent for Public Benefit to be delivered through Future VPAs

88. The proportion of public benefit to be delivered through this specific VPA will set

a precedent for future VPA negotiations for land outside of the CBD. The VPA should be renegotiated to capture a value closer to 50% of the value uplift to ensure other VPAs deliver the same amount of public benefit in the future.

89. In addition, not accepting the offer in its current form will indicate that Council is not willing to accept and attribute value to land within setbacks and laneways, which the current offer includes. This will ensure that future VPAs do not artificially attribute value to these items which are considered to be standard development outcomes required within a development consent.

Disadvantages Delays

90. Renegotiating the VPA offer to receive a value closer to 50% of the value uplift

will delay the progression of the VPA depending on the time taken to finalise the items.

91. This may delay the finalisation of the Planning Proposal. Even if the Planning Proposal and Draft DCP proceed, there is still likely to be a delay if they have to wait post exhibition of the final VPA position to be resolved.

Risks

92. Proceeding to renegotiate the VPA offer to capture a greater value may result in

the applicant withdrawing the offer in its entirety, in which case Council will not receive any public benefit as a result.

93. Whilst the offer in its current form (according to Council’s valuation methods) only delivers 11% of the value uplift, the receipt of the items which constitute this 11% would still provide some degree of public benefit and therefore its withdrawal would be a loss to the local community and Council. The offer in its current form would add to the Council’s Affordable Housing Bank, providing key workers and their families with affordable rental housing. Similarly the monetary contribution would assist with the delivery of local community facilities. Whilst the amount is considered to not be satisfactory and is not proportionate to the value uplift received by the landowner, the offer would still deliver some public benefit and would be at a loss to the community should it be withdrawn.

94. In the event the applicant withdraws the VPA offer, the Planning Proposal could

proceed and deliver a significant increase in development potential to the landowner without delivering any direct public benefit to the local community besides the contribution imposed under Section 94A (1% of the estimated cost of works).

95. Council’s response to this could be to defer any further consideration of the

Planning Proposal pending either:-

I. Council’s value sharing policy framework being resolved; or


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II. The release of the final Parramatta Road Urban Transformation Strategy which is scheduled to be released by the end of 2016.

96. Given the position Council has previously taken in relation to the Draft

Parramatta Road Strategy where Council was supportive of the establishment of an alternate funding mechanism that captured some of the value uplift deferral of this Planning Proposal for this site to obtain more certainty on the future infrastructure funding framework under the Draft Parramatta Road Strategy is a position that could be supported.

CONCLUSION AND NEXT STEPS

97. Staff recommend that the VPA offer not be accepted in its current form as the

offer as it stands does not sufficiently contribute to the infrastructure or facilities required to address the future infrastructure demands and other needs of the community as identified in the Draft Parramatta Road Urban Transformation Strategy. It is considered that the subject site should make a more significant contribution in proportion to the density increase this site is proposing for the North Granville Precinct.

98. It is recommended that Council renegotiate an offer that is closer to a value of 50% of the value uplift to ensure the offer and associated Planning Proposal is in the public interest.

99. In relation to the Draft Development Control Plan discussed in the body of this report it is recommended that the Draft DCP be exhibited concurrently with the Planning Proposal. The Draft VPA could be exhibited separately to allow the Planning Proposal and Draft DCP to proceed to public exhibition. A similar arrangement was recently put in place for 142-154 Macquarie Street where Council resolved to permit the Planning Proposal and Draft DCP to be exhibited with the Draft VPA to be exhibited in a separate process. However, if this arrangement is permitted it would be on the condition that the Planning Proposal would not be forwarded to the Department of Planning Post public exhibition unless the Draft VPA is exhibited and in force.

100. The Interim General Manager should be given delegation to allow him to endorse the final draft legal document and associated explanatory note for the purposes of public exhibition if he is satisfied that the Draft VPA provides an appropriate level of infrastructure to address future needs associated with the growth proposed under the Draft Parramatta Road Urban Transformation Strategy.

Sonia Jacenko Project Officer – Land Use Planning Robert Cologna Service Manager – Land Use Planning Sue Weatherley Director Strategic Outcomes and Development

Greg Dyer

Interim General Manager


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ATTACHMENTS: 1 Draft Site Specific Development Control Plan 13

Pages

2 Council Report on Planning Proposal for the land on the corner of Parramatta Road, Good Street, and Cowper Street, Granville

20 Pages

3 Gateway Determination 4 Pages

4 Chronology of VPA Negotiations 5 Pages

5 Report of the Parramatta CBD Infrastructure Funding Review Committee

13 Pages

6 Final VPA Offer 1 Page 7 Confidential Memo 5

Pages

8 Supplementary Letter to final VPA offer 3 Pages

REFERENCE MATERIAL

Council (Development) 12 September 2016 Item 8.4 …...Council (Development) 12 September 2016 Item...

Documents

Transcript of Council (Development) 12 September 2016 Item 8.4 …...Council (Development) 12 September 2016 Item...