Council 11 July 2022 Item 13.7
ITEM NUMBER 13.7
SUBJECT LATE REPORT: Response to the finalisation of the Parramatta CBD Planning Proposal and changes made by the Department of Planning and Environment
REFERENCE F2022/00105 - D08601296
REPORT OF Group Manager, Strategic Land Use Planning
CSP THEME: INNOVATIVE
workshop/briefing date: 11, 18 & 30 May,15 June & 6 July 2022
PURPOSE:
The Department of Planning and Environment (‘Department’) finalised the Parramatta CBD Planning Proposal (‘CBD PP’) on 6 May 2022. In finalising the CBD PP, the Department made several key policy changes to the final version of the CBD PP (as endorsed by Council on 15 June 2021). The purpose of this report is to establish Council’s response to the key policy changes made by the Department.
Guiding Principles
(a) That in responding to the changes the Department of Planning and Environment (‘Department’) made to the Parramatta CBD Planning Proposal (‘CBD PP’) Council seek to address the following ‘Key Planning Outcomes’:
i. Restore office and commercial floor space market certainty and investment confidence in the CBD
ii. Ensure Activation of Parramatta River
iii. Provide a Planning Framework for land north of the Parramatta River
(b) That Council seek to address the ‘Key Planning Outcomes’ in accordance with the following ‘Key Principles’:
i. Principle 1 - Equitable process and opportunity for involvement
ii. Principle 2 - Consistent application of policy
iii. Principle 3 - Efficient use of resources for Council and applicants
iv. Principle 4 - Manage planning risk for Council and applicants
v. Principle 5 - Timely delivery of new planning controls
Commercial Floorspace and Phillip St Block
(c) That Council write to the Minister for Planning and the Department seeking:
(1) An increase to the permitted commercial floor space as resolved by Council on 15 June 2021 in the existing B3 Commercial Core and shown in Figure 1 via the preparation of a State Environmental Planning Policy (‘SEPP’), and that the SEPP become effective at the same time as the CBP PP (Amendment 56), that is 14 October 2022.
(2) That the Department prepare a separate SEPP as shown in Figure 2 for certain land zoned B4 Mixed Use and B3 Commercial Core (not covered by the SEPP referred to in (c)(1) above), to introduce additional floor space that allows for commercial uses consistent with Council’s resolution of 15 June 2021, that is informed by a study prepared in consultation with Council and addresses the concerns raised by the Department in its ‘Plan Finalisation Report’ dated April 2022 when the CBD PP was finalised, and that this SEPP become effective by December 2022.
(3) That the Department provide advice on amendments to the exhibited Draft Parramatta CBD Development Control Plan to align with the proposed SEPPs above for Council’s consideration.
(4) Confirmation from the Department that existing and any new Site Specific Planning Proposals (‘SSPPs’) may continue to be assessed by Council, after the preparation of the relevant SEPP, and note that this will necessitate an extension to the timeframe within the Gateway Determination for the St John’s Planning Proposal.
(5) That Council be consulted on the draft SEPPs.
(6) That should any SEPP process described above result in an increase in permitted density for the Phillip Street block that:
a. The Parramatta CBD Local Contributions Plan endorsed by Council on 14 June 2022 and subsequently forwarded to the Department for consideration be amended to apply the following rates to the Phillip Street Block:
· Residential Accommodation or Mixed-Use Development where the total development cost is over $250,000 — 5%
· Other development where the total development cost is over $250,000 — 4%
· Any development where the total development cost is $250,000 or less — Nil.
b. The Minister be requested to ensure enabling changes required to the regulations, to enable the application of the higher rate proposed in the Parramatta CBD Contributions Plan, also reflect this change to the Plan.
North Paramatta
(d) That Council write to the Minister for Planning and the Department:
(1) Seeking funding for a Study for North Parramatta that incorporates urban design, heritage and economic analysis and additional temporary staff to manage the project (estimated at up to $500,000).
(2) Advising that Council will not commence the Study until confirmation of funding and in-kind support has been provided.
(3) Seeking advice on how Council manage any new SSPPs lodged for sites north of the river prior to completion of the Study and associated plan amendment.
EXCEPTIONS
(e) Further, that Council note that new SSPPs for sites within any part of the CBD that do not:
1 seek any increase in FSR, or
2 seek to amend other planning controls that are being considered in the SEPP process(es) described in (c) above
will be processed by Council (examples include proposals for minor changes in height with no increase in FSR or changes to parking rates or land reservation acquisitions).
BACKGROUND
1. Preparation of the Parramatta CBD Planning Proposal (‘CBD PP’) has occurred over many years. The planning process has involved significant research and studies and extensive consultation with various stakeholders. The purpose of the CBD PP is to establish a new planning framework for the Parramatta CBD so as to ensure the area achieves its full potential as Greater Sydney’s “Central City”.
2. In summary, the CBD PP, as endorsed by Council on 15 June 2021, pursued the following outcomes:
b. Over 1.97 million sqm of additional new
commercial floor space (including the allowance of about 312,000 sqm of office
space under the unlimited office space policy in the B3 Commercial Core zone).
c. The land area where tall towers would be permissible
would have more than quadrupled from the current planning controls, allowing
for towers up to 243m in height (approx. 60 storeys commercial, 75 storeys
residential), which will completely transform the city skyline.
d. Protects solar access to key public spaces and
also improves the environmental performance of new towers.
e. Mandate a network of active streets throughout
large sections of the Parramatta CBD and broadens the scope for where design
excellence competitions are required in new towers.
f. Establish a new framework to better
manage flood risk in new developments.
g. Significantly minimise traffic impacts through
lowering maximum parking controls and allowing for some road widening.
h. Improves heritage controls above the normal standard requirements and also preserves existing controls in and around the World Heritage Item at Old Government House.
3. The CBD PP was publicly exhibited from 21 September 2020 to 2 November 2020. Following the exhibition period and detailed consideration of the submissions received, on 15 June 2021, Council resolved to finalise the CBD PP and submit it to the Department of Planning and Environment (‘Department’) for finalisation. Accordingly, the CBD PP was submitted to the Department on 1 July 2021 in accordance with the Council resolution.
4. Following an assessment process by Department officers, the Department finalised the CBD PP on 6 May 2022 through notification of the Parramatta Local Environmental Plan 2011 (Amendment No 56) (‘LEP Amendment 56’) on the NSW Legislation website. LEP Amendment 56 formalises the planning control changes as proposed under the CBD PP and formally takes effect on 14 October 2022. A copy of LEP Amendment 56 is provided at Attachment 1. In finalising the CBD PP, the Department made several key policy changes to the original version endorsed by Council on 15 June 2021. These key policy changes include:
a. Opportunity Sites –
the Opportunity Sites control which allowed for a bonus 3:1 FSR for certain
sites has been removed.
b. Unlimited Commercial
Premises FSR – the unlimited commercial premises FSR control in certain
parts of the B4 Mixed Use zone has been removed.
c. Unlimited Office Premises
FSR – the unlimited office premises FSR control in the B3 Commercial Core
zone has been removed.
d. Community Infrastructure
Principles – the community infrastructure principles provision has been
removed (and base/incentive height/FSR maps consolidated accordingly).
e. North Parramatta –
the area north of the river has been removed from the proposal and will retain
its existing controls at this stage. A further review of this area will be
required.
f. Phillip Street Block – the street block bound by the river, Charles, Phillip and Smith Streets has been removed from the proposal and will retain its existing controls.
5. A copy of the Department’s Plan Finalisation Report is provided at Attachment 2, which provides their supporting justification for these changes.
BROADER IMPACTS OF THE MINISTER FOR PLANNING’S DECISION
6. Most critically the Minister for Planning’s decision has decreased the floor space that can be developed to deliver jobs in the CBD PP due to the removal of the unlimited commercial and office space provisions.
7. A secondary impact is that a reduction in residential capacity has also occurred particularly due to the deferral of changes to planning controls in North Parramatta and the Phillip Street block and removal of opportunity sites FSR bonus.
8. The policy changes resulted in a reduction of theoretical development capacity across the CBD, equating to an estimated loss of 15,280 jobs and 3,440 dwellings. Most of this loss, approximately 13,000 jobs, is due to the removal of the “unlimited” office floor space control in the B3 Commercial Core zone. Office floor space capacity should be maximized to ensure the maximum number of jobs is provided in the CBD, i.e. that sites are not under-developed.
9. Council Officers are of the view that the Key Planning Outcomes Council should consider as part of its response to the changes to the CBD PP are:
Key Planning Outcome 1 – Restore office and commercial floor
space market certainty and investment confidence in the CBD
• The focus should be on
increasing density south of the river to support capacity for jobs.
Key Planning Outcome 2 – Ensure Activation of Parramatta River
• Ensure regeneration along the
southern side of the river is facilitated by reviewing the controls in the
Phillip Street block whilst addressing the Department’s concerns about
transition in building form.
Key Planning Outcome 3 – Provide a Planning Framework for land north of the Parramatta River
• Provide certainty for redevelopment along the light rail route and more broadly north of the river by developing a planning strategy that addresses the Department’s urban design and heritage concerns.
10. The State Government’s decision has created planning risk. There is no assurance that the Department would support a Site Specific Planning Proposal (‘SSPP’) for additional density without sufficiently addressing their concerns in a cumulative and holistic manner. This creates uncertainty for Council and applicants for SSPPs. It means decisions to progress new planning controls via a SSPP have a higher degree of risk. This high-risk planning environment creates an uncertain investment environment for development in the City.
11. Council has a significant role in influencing and managing this risk, by providing leadership and sound planning guidance to address the concerns of the Department and industry. It is important that developments that will deliver jobs capacity for the Parramatta CBD are not lost or unnecessarily delayed. Sustainable and efficient investment patterns occur when investors have increased certainty and confidence about planning application outcomes. Council officers are therefore recommending that the Department amend the LEP via a SEPP to address the concerns regarding commercial floorspace and the Phillip Street Block (as described in the recommendation). A SEPP process is the most efficient and effective way to address Key Planning Outcomes 1 and 2.
12. The principles that have influenced the Council officer’s recommendation are:
Principle 1 - Equitable Process and Opportunity for Involvement
• All
landowners/stakeholders should follow the same consistent process and/or have
the same opportunity to be involved in the process.
Principle 2 - Consistent Application of Policy
• Council
should establish, support and advocate a policy framework that is applied
consistently. This represents good decision making and maximises certainty and
confidence for the investment market.
Principle 3 - Efficient Use of Resources
• Minimise
the resources/ time Council and applicants use to get to final outcomes.
Principle 4 - Manage Planning Risk for Council and Applicant
• Obtaining
the Department’s formal agreement and approach to address the concerns of
Council and industry to minimise uncertainty and risk.
Principle 5 - Timely
• Council should seek to provide market certainty as soon possible.
ISSUES/OPTIONS
Unlimited Commercial Premises FSR / Unlimited Office Premises FSR
13. The CBD PP that was endorsed by Council on 15 June 2021 allowed for:
a. unlimited commercial premises FSR on certain land in the B4 Mixed Use zone as shown on the Additional Local Provisions Area Map.
b. unlimited office premises FSR in the B3 Commercial Core zone.
14. Both provisions were only meant to apply to sites that had an area of at least 1,800sqm. The intention of these provisions was to facilitate more employment generating development in the Parramatta CBD. Council Officers estimate that just in the Commercial B3 zoned land there was capacity for approximately 13,000 additional jobs in the CBD, which is now foregone due to their removal.
15. In finalising the CBD PP, the Department has removed both of these bonus provisions. The Department’s Plan Finalisation Report notes the following in relation to this matter:
“However, in finalising the proposal the Department undertook built form modelling which identified concerns that maximum building heights, inclusive of bonus (up to 243m) and unlimited FSR provisions could lead a proliferation of bulky buildings, homogenous built form outcomes, poor solar outcomes, walls of development fronting the Parramatta River, Church Street, George Street
and Prince Alfred Park, all areas of key historical importance. Concerns were also raised about the loss of blue-sky, potential for wind tunnel effects and a lack of built form transition.”
16. Council officers in briefings to Councillors on 11, 18 and 30 May and 15 June 2022 have discussed progression of an urban design study and economic study to retrieve jobs capacity lost because of the Department changes. The studies, at a cost of $60,000, could be undertaken by Council and inform a Council led Planning proposal to seek to change the controls.
17. Council officers have since held discussions with officers from the Department who introduced another option for Council to consider when responding to these issues. The Department is considering pursuing a State Environmental Planning Policies (SEPPs) which would amend the LEP.
18. The Department have suggested that this mechanism could be used to introduce some of the floorspace previously proposed by Council but would seek to introduce an additional planning clause to address the urban design issues raised by the Department in it’s Plan Finalisation Report (refer to Attachment 2).
19. This SEPP (first SEPP) would introduce unlimited office floorspace in the B3 Commercial Core as shown in Figure 1, and that it could proceed without any public exhibition/consultation as the provision for unlimited office floorspace was exhibited as part of the CBD PP process endorsed by Council on 15 June 2021.
20. Council officers are recommending that a second SEPP be pursued to introduce additional FSR for commercial uses on certain land in the B4 Mixed Use zone as shown on the Additional Local Provisions Area Map, as well as B3 Commercial Core zoned land (not covered in the first SEPP) as shown in Figure 2. Council endorsed additional FSR on the land to be included in the second SEPP when the CBD PP was endorsed by Council on 15 June 2021. The difference however now is the FSR that would be introduced through this second SEPP would be allocated or specified (i.e. not unlimited commercial FSR) and based on urban design analysis prepared by the Department and in consultation with Council that addresses the issues identified in the Department’s Plan Finalisation Report.
Figure 1: SEPP Amendment for the Commercial Core
21. Table 1 below assesses the original option presented to Councillors (Option 1) being that Council prepare the required studies that inform a Council-led Planning Proposal, and the SEPP option (Option 2) against the planning principles described above.
Table 1: Comparison of Council led Planning Proposal v SEPP process to restore office floorspace capacity
|
|
Option 1 – Council pursue studies and Council led Planning Proposal |
Option 2 - Department led SEPP process (as recommended – i.e. 2 SEPPs) |
|
Key Planning Outcome 1 - Restore
office and commercial floor space |
Council process would address this, albeit it the process will take longer |
The Department’s option would address this quickly |
|
Principle 1 - Equitable Process and Opportunity for Involvement |
Allows applicable land to be considered via one process. |
Prioritises increasing FSR for office uses in the B3 zoned commercial area as shown in Figure 1; and then considers increases to FSR for commercial and office uses in areas in Figure 2. |
|
Principle 2 - Consistent Application of Policy |
Allows for a consistent application of policy |
Allows for a consistent application of policy. |
|
Principle 3 - Efficient Use of Resources |
It would only be efficient if Council did not process SSPPs. |
SEPP process is the most efficient way to amend the LEP compared to a Planning Proposal with lower impact on council resources. |
|
Principle 4 - Manage Planning Risk for Council and Applicant |
Manages planning risk as it provides an assessment framework, albeit it the process will take longer |
Manages planning risk as it provides assessment framework for all sites in CBD quickly. |
|
Principle 5 - Timely |
Timely if Council does not pursue SSPPs at the same time otherwise both Council study and SSPPs will be slowed down |
Provides a more timely outcome |
22. Council officers note that the Department legally can pursue the SEPP approach without Council’s agreement. It is noted that some landowners in the areas subject to the possible SEPPs, have been advocating to senior Council officers about the need to reflect Council endorsed position in the final LEP, and have also advised they have been making similar representations to the Minister for Planning and the Department. The areas subject to the SEPPs are strategically important areas. Promoting jobs growth and investment in these precincts is a key pillar in delivering economic and other complementary benefits to the CBD and the residents of Parramatta and Western Sydney, and there has been substantial development interest in this precinct in recent years.
Figure 2: Areas to be subject of the second SEPP amendment recommended by Council officers (area hatched)
23. Given the benefits to the City, it is recommended that:
a. Council request the Department pursue a SEPP to increase commercial floor space in the existing B3 Commercial Core (as per Figure 1); and
b. Council request the Department to pursue a SEPP to increase commercial floor space on certain land in the existing B4 Mixed Use and B3 Commercial Core zones not covered by the first SEPP (as per Figure 2), that is based on urban design analysis in consultation with Council.
24. If the Department agreed to pursue the SEPP processes this would deliver amended planning controls in a manner that achieves the key planning outcomes and be more equitable, efficient in terms of resources and timely than a Council led approach. This approach would also better address the principles Council officers are recommending should guide the process.
Phillip Street Block
25. The CBD PP endorsed by Council on 15 June 2021 included the street block bound by Parramatta River, Charles, Phillip and Smith Streets (referred to as the “Phillip Street Block”) for up-zoning. The CBD PP allowed for an incentive FSR of 10:1 (12:1 with bonuses), incentive height of 211m(RL) (243m(RL) with bonuses), unlimited commercial premises FSR and also Opportunity Sites FSR of 3:1.
26. In finalising the CBD PP, the Department has removed this area. As a consequence of this removal, the Phillip Street Block retains its existing controls, which allow for a height of 80m (25 storeys) (92m/100m* (32 Storeys) with bonuses) and 6:1 FSR (6.9:1/7.5:1* with bonuses).
*Note. A 25% bonus would be applicable for a purely commercial development under existing controls.
27. The Department notes urban design related issues as justification for its removal of this precinct from the CBD PP. The Department’s Plan Finalisation Report notes the following in relation to this matter:
“Submissions from the National Trust of Australia (NSW Branch) raised concerns about the proposal in relation to river, advising it considered the heights of the buildings and their setbacks adjacent to the river need to acknowledge the cultural and historical significance of this landscape.
The Department’s built form modelling similarly raised concerns that the proposed building heights and FSRs along the river foreshore permit development that would visually dominate the scale of the river. In response to Department’s modelling an independent rapid urban design assessment was commissioned.
This report found that Parramatta has a unique relationship with its river and the CBD PP risks jeopardising this relationship for future generations. The report also notes recent development along the river appears to commercialise the foreshore and visually dominates the river corridor. This type of development is similar to Barangaroo in Sydney, but the river is substantially different in scale and aspect to Sydney Harbour. The resulting massing controls could result in built form that detracts from the character of the river and could adversely impact Parramatta’s identity and its desirability as a place to live and work.”
28. The option Council officers presented at
Councillor briefings on 11, 18 and 30 May and 15 June 2022 was for Council to
pursue an urban design analysis. However, it is now recommended that this block
be included in the second SEPP. Council
Officers could work with the Department in a partnership that deliver a more
timely response to restore market confidence. The justification for this
is as follows:
a. Significant urban design
analysis has already been undertaken in this precinct. This previous study work
just needs to be reworked in a form that supports a new SEPP.
b. Based on the previous
analysis undertaken, Council officers are comfortable that an FSR greater than
the current FSR of 6:1 can be achieved in this precinct, without adversely
impacting the river.
c. Given the concerns raised
by the Department pursuing the previously endorsed planning controls is
unlikely to be successful.
d. In accordance with Key Planning Outcome 2 Council needs to make regeneration of these sites feasible if we are going to get a better interface with the river, including with active frontages. It is noted that the existing buildings in this precinct ‘turn their backs’ to the river and there is a poor interface currently. Some up-zoning is required to encourage urban regeneration. This will help to facilitate Council’s vision for the river as a vibrant and activated public space.
North Parramatta
29. The CBD PP endorsed by Council on 15 June 2021 included the area north of the Parramatta River for up-zoning as a part of the overall CBD precinct. The endorsed CBD PP generally allowed for incentive heights of 80m (25 storeys) (92m (29 storeys) with bonuses) and incentive FSRs of 6:1 (7.2:1 with bonuses).
30. In finalising the CBD PP, the Department has removed the area north of the Parramatta River from the proposal and consequently the area will retain its existing planning controls. Existing controls generally allow for 24m/36m height (7-11 storeys) and 3:1/4:1 FSR, although it is noted that there are two sites currently with higher FSRs of 4.8:1 and 6:1 and higher heights of 49m and 80m, (15 or 25 storeys) respectively. The Department notes a number of urban design and heritage concerns as justification for their position on the removal of this area. The Department’s Plan Finalisation Report notes the following in relation to this matter:
“In response to these concerns the Department recommends the area of land known as Parramatta North not be progressed as part of this plan. This allows further consideration to be given to the provision of development within proximity to the Parramatta Light Rail, transitions, solar access, lower building heights and FSR along the river, consideration of the adjoining HCA and heritage attributes generally, community concerns, amenity, and character. It is noted that Council is currently undertaking a review of planning provisions within the planning investigation areas and this may provide opportunity to review holistically providing a more complete picture of future character and built form transition.”
31. Council officers recommend Council pursue a comprehensive study for North Parramatta that incorporates urban design, heritage and economic analysis, and then following this study, prepare a Precinct Planning Proposal to implement the findings of this study.
32. The issues identified in the Department’s Plan Finalisation Report for North Parramatta have a level of complexity that is greater than the issues south of the river. The following issues contribute to the complexity of resolving planning controls:
· The Department suggested any future review should consider adjoining areas, so a review of the study area boundary is required
· The previous studies undertaken may not cover some of the areas included in any future study area. South of the river any review would be assisted by previous studies; however, this may not be the case north of the river
· Council received numerous submissions when the CBD PP was exhibited highlighting community concern about the future character of this area with potentially disparate view of how any change should be managed. There is a broader consensus south of the river that greater densities are required to support the growth of the CBD than there are north of the river
33. In order to address the complexity above, Council officers are of the view that Council are better placed to review the controls and determine what the future character of the North Parramatta area should be.
34. However, this exercise would involve
significant resources (estimated cost – up to $500,000), and Council
should seek funding from the Department to undertake this work given the
significant expense of previous studies prepared and that it was the
Department’s decision to have the precinct removed from the CBD PP. The justification for this approach is as
follows:
a. In
accordance with ‘Key Planning Outcome 3’ regeneration of this area
should be supported given the introduction of Parramatta Light Rail - it would
be a missed opportunity not to review the controls in this area in light of the
significant infrastructure investment by Government. Further, the area is
already identified as a part of the “Parramatta City Centre” under
the current Parramatta LEP 2011.
b. The Department has agreed to provide assessment criteria for the review so as to ensure their heritage and urban design concerns are addressed in this new phase of work.
c. Enables
a visioning/consultation exercise with landowners and other stakeholders,
including Councillors, to be undertaken so as to help guide the future for this
precinct. A visioning document could then be endorsed by Council which would
then inform a Precinct Planning Proposal.
35. The planning controls for North Parramatta are a contentious issue with 76 submissions being received during the CBDPP consultation period. During the preparation of the CBD PP various studies were pursued to look at the contentious issues. Areas were deferred from the CBD PP to enable further analysis. The removal of these precincts led the Department to conclude in their Plan Finalisation Report that Council has not looked at the precinct holistically.
36. It is important that stakeholders are engaged and differing views about the future character of the precinct dealt with transparently so that a holistic approach can be taken. It is for this reason that Council officers recommend that consultation to establish a vision be undertaken and that the vision be endorsed by Council prior to commencing a Planning Proposal process. It will be important to involve and inform stakeholders during this process.
37. It is expected that the next 6 months would involve securing funding from the State Government, using the funding to recruit a Project Manager and then engaging consultants to enable work to commence in 2023. The Project would involve the following key milestones:
· Quarter 3 and 4 of 2022 – Secure funding, engage Project Manager and consultants, and determine revised study area based on the Department’s Plan Finalisation Report
· Quarter 1 and 2 of 2023 –Engage with community, landowners and key stakeholders to establish a vision for North Parramatta
· End of Quarter 2 2023 – Council endorse a vision document for the purposes of public consultation
· End Quarter 3 2023 – Council endorse commencement of Council led Planning Proposal
· Mid 2024 – Expected finalisation of Planning Controls
38. This timetable is contingent on receiving funding from the Department, how SSPPs are managed in this area and the Department agreeing to pursuing the recommended 2 SEPPs for land identified in Figures 1 and 2.
Opportunity Sites
39. “Opportunity Sites” were identified in the CBD PP as endorsed by Council on 15 June 2021. Opportunity Sites were shown mapped on an Opportunity Sites Map, and were significantly reduced by Council following a review in response to a Gateway Determination condition prior to exhibition. These sites were able to access a bonus FSR of 3:1, generally taking them from an FSR of 12:1 (including bonuses) to an FSR of 15:1, subject to meeting certain requirements, including:
a. Minimum site area of 1800sqm and minimum dimensions of 40m x 35m (corner sites) and 40m x 40m for all other sites.
b. Preparation of a site-specific DCP.
40. In finalising the CBD PP, the Department removed the Opportunity Sites control and supporting map. The Department’s Plan Finalisation Report discusses urban design related concerns in the rationale for their position, including the pressure an FSR of 15:1 would have on setbacks, resulting in bulky built form, and the impacts this would have on tower slenderness and tower separation.
41. Council officers recommend Council
not pursue any controls that seek to re-introduce the Opportunity Sites bonus
as removed by the Department. The
justification for this is as follows:
a. Opportunity Sites were only intended to apply
to a limited number of particular sites in the B4 Mixed Use Zone. The removal
of the control does not have a broader effect on the wider CBD area.
b. Opportunity Sites were originally introduced as
part of Council’s proposed infrastructure funding strategy, linked to a
“Phase 2” value uplift of 50%. This has been replaced by the new
s7.12 contributions plan and is no longer relevant.
c. In accordance with Key Planning Outcome 1
detailed in the previous section of the report any additional floor space to be
pursued on these sites should be focused on jobs rather than housing.
d. Bonus FSR on these sites could be considered as
part of the response to the removal of the Unlimited Commercial Floor Space
bonus (refer to discussion below).
e. Council already undertook a review of Opportunity Sites in response to a Gateway Determination condition, so there is potentially little value in undertaking a further review given the previous work undertaken.
Community Infrastructure Principles
42. The CBD PP endorsed by Council on 15 June 2021 included a provision that allowed for community infrastructure principles. The provisions were intended to operate in a way that required development to comply with the community infrastructure principles to access increased heights and FSRs. The draft plan contained base height and FSR controls which identified the controls in place prior to the CBD PP commencing with the new higher FSR and height shown on incentive maps. To be able to develop to the incentive height and FSR a contribution to community infrastructure was required. The contribution was based on a value capture model where the contribution would be calculated as a proportion of the land value uplift attributable to the extra development potential allowed by the incentive height and FSR.
43. The origin of these provisions related to Council’s infrastructure funding strategy through a proposed value sharing mechanism that was changed as a result of the release of a Department Practice Note on Planning Agreements that restricted the use of value capture (and was then effectively replaced with a S7.12 Contributions Plan). The proposed community infrastructure principles read as follows:
a. Public access to the community infrastructure network has been maximised in the design of the development.
b. There is appropriate community infrastructure in place or planned to meet the needs of the proposed development acknowledging the additional density permissible under this clause.
c. The development includes community infrastructure where the size of the site, the location of the site, and the nature of the development will allow for the provision of that community infrastructure.
44. In finalising the CBD PP, the Department has removed the community infrastructure principles provisions and also consolidated the base/incentive FSR and height maps into standard format FSR and height maps, with the incentives height and FSR identified as the maximum provisions for each site. The Department’s Plan Finalisation Report notes the following in relation to this matter:
“In February 2021 the Department released the Practice Note on Planning Agreements confirming that value capture should not be the primary purpose of planning agreements. In its post exhibition consideration of the proposal, Council noted this policy and amended the planning proposal to include community infrastructure principles, rather than requirements. Council has also since adopted a draft 7.12 contribution plan to capture contributions towards local infrastructure, which is currently being considered by the Department due to the requested increase levy rate requiring approval of the Minister.
The Department acknowledges that Council has sought to address this policy direction through its post exhibition changes and that work is underway to plan strategically for the delivery of local infrastructure. It is considered that the amended proposal’s community infrastructure principles would still suggest a level of value capture is required to access the higher planning controls. As such, the Department has made a further post exhibition change to remove the community infrastructure clause and consolidate the building height and FSR provisions into one map, retaining the incentive provisions as the maximums. This will also provide greater certainty to potential development outcomes and allow for ease of understanding when viewing controls.”
45. Council officers recommend Council not
pursue any controls that seek to re-introduce Community Infrastructure
principles in the LEP. The
justification for this is as follows:
a. These principles were
originally recommended to support the Council’s infrastructure funding
strategy through a proposed value-sharing approach. This approach was changed
due to the effect of a Department Practice Note on Planning Agreements that
restricted their use for value capture.
b. Given that Council has now switched to a Section 7.12 Contributions Plan with higher rates to fund infrastructure this is no longer relevant.
Site-Specific Planning Proposals in the Parramatta CBD
46. Council currently has eight (8) site-specific planning proposals (‘SSPPs’) in the CBD area that are under assessment. Some of these SSPPs have now been adversely affected by the changes made by the Department to the CBD PP, as they were relying on policy outcomes that had been previously endorsed by Council in the CBD PP, for example the unlimited office premises FSR provisions being removed. As result of this, Council officers are anticipating that applicants may want to pursue these SSPPs on their individual merits, given the CBD PP has not delivered the policy outcomes they were expecting. Further, Council officers are anticipating the lodgment of new SSPPs for other sites that were relying on the policy outcomes of the original CBD PP as endorsed by Council. These new SSPPs are also likely to argue their case to be considered on their own individual merits.
47. There are numerous learnings Council
officers have gained whilst pursing the CBD PP process. One key issue that
significantly contributed to the CBD PP timeframe (it took 9 years to reach
finalisation) was the impacts of progressing SSPPs. At its peak the number of
SSPPs in the CBD was in the order of 30 applications. Progressing these
applications had the following impacts:
a. Early in the process it created a difficult
environment where SSPPs were being assessed at the same time as the detailed
analysis to support the CBD PP framework was being progressed. There was
significant planning risk at that time. This meant SSPPs would sit dormant for
long periods because Council Officers were unable to progress them without a
policy framework. Pre-lodgment meetings, responding to applicant enquires and
preliminary assessment of these SSPPs meant resources were diverted away from
formulating the CBD PP framework. This delayed both the CBD PP and caused
frustration for applicants and Councillors about the time it was taking to
process SSPPs.
b. Once Council had endorsed the CBD PP for the
purpose of requesting a gateway it was possible to assess these against
Council’s endorsed policy framework. The SSPP applications could
proceed because there was a clear framework but there was a significant number
of SSPPs all trying to be progressed at once. Both the CBD PP and SSPPs were
proposing to deliver the same set of planning controls but in a very
inefficient manner. Council was effectively pursuing two separate processes to
achieve exactly the same planning policy outcome on these sites. This resulted
in significant delay for both SSPPs and the CBD PP.
c. Progressing of some of these SSPPs ultimately resulted in inconsistent policy outcomes. Some SSPP sites achieved opportunity site bonuses and unlimited FSR because they were able to be finalised before the CBD PP and before the Department made its decision to amend the CBD PP.
48. Progressing SSPPs at the same time as Council is progressing a Council led Planning Proposal (in the case for North Parramatta), or the Department is pursuing a SEPP based review is inconsistent with the guiding principles officers are suggesting should be pursued refer to Table 2.
Table 2 – Consistency of SSPPs with the Guiding Principles
|
Principle 1 - Equitable Process and Opportunity for Involvement
|
SSPPs require Council to consider some sites via a different process to those being pursued by a Council or Department led process.
For Planning Proposals there are different exhibition periods at different times and the ability to consider cumulative impact issues is significantly decreased. |
|
Principle 2 - Consistent Application of Policy
|
Progressing SSPPs and the CBD PP at the same time meant some sites in the CBD achieved controls (ie 470 Church Street achieved 6:1 in North Parramatta, 2 Valentine Avenue achieved unlimited commercial floor space in B4 Zone) that by the end of the process were not part of the controls finalised by the Department through Amendment 56.
SSPPs significantly increase the risk the planning policy will not be applied consistently. |
|
Principle 3 - Efficient Use of Resources
|
Pursuing SSPPs and Council led PP/ Department led SEPPs at same time is effectively pursuing the same outcome via two separate and parallel processes. It is not efficient to pursue two processes to achieve the same outcome. When the task is complete one of the processes will have been a waste of time.
The experience with the CBD PP and SSPPs is recent evidence of this and results in significant delays and longer periods of uncertainty. |
|
Principle 4 - Manage Planning Risk for Council and Applicant
|
Pursuing SSPPs without the foundation of a Planning Policy Framework increases the risk that SSPPs will not be supported by Council and/or Department officers and that Council and applicants will utilise resources to pursue SSPPs that do not lead to any of the Key Planning Outcomes being achieved. |
|
Principle 5 - Timely
|
The experience with the CBD PP is that the insistence by applicants that they could not wait for the CBD PP led to an influx of SSPPs that resulted in very long processing times for SSPPs and contributed to the CBD PP process extending across 9 years.
Focusing on a Council led PP or Department led SEPPs without SSPP to deflect resources and attention will result in a more timely outcome for all parties in the CBD. |
SSPPs for sites south of the River within the areas subject to the two SEPPs
49. Council officers remain concerned that submission of a number of SSPPs at the same time as Council or the Department are undertaking a review will delay achievement of an amended planning framework in a timely manner. However, the extent of the impact depends on the Department’s approach. If the Department are willing to undertake a review of the identified land in Figures 1 and 2 via two SEPP based reviews within the timeframe as recommended, the likelihood that Council will receive an influx of new SSPPs is reduced.
50. Table 3 below identifies the SSPPs that will be influenced by the two SEPPs.
Table 3 – status of SSPPs within the areas subject to the two SEPPs
|
SSPP Site |
Status |
Zoning / Location |
|
110 George Street |
SSPP not reported to Council as controls were consistent with that being delivered via CBD PP. The Minister’s decision to remove unlimited office floor space means the SSPP is now inconsistent with the Minster endorsed CBD PP (through Amendment 56). |
B3 Commercial Core
Located within the area that will be addressed by the first SEPP process. |
|
90-96 Phillip Street
|
SSPP not yet reported to Council. Proposed controls consistent with Council endorsed CBD PP but inconsistent with Minster endorsed CBD PP (through Amendment 56). |
B4 Mixed Use
Located in the area that will be addressed by the second SEPP process. |
|
57 Macquarie Street
|
SSPP not yet reported to Council. SSPP not consistent with Council or Minister endorsed PP due to sliding scale application. |
B4 Mixed Use
Would not be subject to the second SEPP as the site is not shown on the Additional Local Provisions Map in the CBD PP, therefore will continue as a SSPP post finalisation of the second SEPP |
|
St John’s Church Site
|
Gateway issued by Department requires SSPP to be finalised by 30 August 2022. SSPP seeks FSR consistent with the principles of the CBD PP, but not as endorsed by the Minister through Amendment 56.
An understanding of the Department’s responses to Council’s recommendation for the two SEPPs is required prior to progression of this SSPP.
The recommendation of this report notes the necessity for an extension to the timeframe within the Gateway Determination for the finalisation St John’s Planning Proposal. |
B4 Mixed Use seeking part rezoning to B3 Commercial Core
|
SSPPs for sites north of the Parramatta River
51. Council have had discussions with a number of applicants interested in lodging SSPPs north of the Parramatta River to seek to progress FSR increases of a similar scale to those proposed in the Council endorsed CBD PP. Until the study discussed in the previous section of this report for this area is complete and sufficiently addresses the concerns of the Department, Council will have no framework to assess these SSPPs. For this reason it is recommended that Council write to the Department/Minister seeking advice on how new SSPPs north of the River should be managed.
52. The only current SSPP with Council in this area is for the McDonalds site (corner of Victoria Road and Church Street) which seeks to apply a site specific car parking rate for the McDonalds restaurant. The applicant has advised that they are considering their position and it is possible that this application will be withdrawn. However, this SSPP does not involve any increase in density and there is no planning reason why this application can not proceed.
53. It is noted that the applicant originally sought a site specific FSR of 6:1 consistent with the CBD PP as endorsed by Council in June 2021 to enable a new mixed use development including new McDoanlds restaurant. However, during the assessment process, those planning controls consistent with the CBD PP were removed from the SSPP, and therefore the car parking rate remained the only matter for the SSPP.
Development Contributions Plan
54. The Parramatta CBD Local Infrastructure Contributions Plan endorsed by the Council on 25 October 2021 proposed Section 7.12 levies within the entire Parramatta City Centre be increased from the current 3% to the following:
a. Residential Accommodation or Mixed-Use Development where the total development cost is over $250,000 — 5%
b. Other development where the total development cost is over $250,000 — 4%
c. Any development where the total development cost is $250,000 or less — Nil.
55. The CBD PP the Minister endorsed on 6 May 2022 did not permit any increase in permitted density in the Phillips Street block (as defined previously in this report) or any land north of the Parramatta River. As a result, a further report was presented to Council on 14 June 2022 advising that given no uplift in density had been permitted, developers of sites in these precincts should not be required to pay the increased contribution rate but instead retain the current rate of 3%.
56. If the Department is willing to pursue the second SEPP this results in increases in the permitted FSR for the Phillips Street block, the increased rates described above should be applied to this block.
57. Any changes to the rates applied for the land north of the Parramatta River should be considered as part of future studies and process described above in this report.
Exceptions
58. Planning Proposals in any part of the CBD that do not seek increases in the permitted density of development will not impact on these studies and can still be assessed ahead of the studies being finalised. Examples include changes to planning standards such as parking rates or land reservations. One example that officers are pursing is a minor increase in the building height at the Riverside Theatre site to enable the redevelopment of the theatre without any increase in FSR proposed for the site.
CONSULTATION & TIMING
Stakeholder Consultation
59. The following stakeholder consultation has been undertaken in relation to this matter:
|
Date |
Stakeholder |
Stakeholder Comment |
Council Officer Response |
Responsibility |
|
18 May 2022 |
Department |
General discussion about CBD PP finalisation. |
Council officers advised that Council is currently formulating its response to the Department’s changes (which includes consultation with Councillors). |
Strategic Land Use Planning Team |
|
28 June 2022 |
Property Council and Western Sydney Business Chambers including impacted members |
Raised concerns about timing of response, impact on investment and any proposal to limit progression of SSPPs |
Issues addressed in body of this report. The Department’s proposal to pursue a SEPP is likely to address the concerns of a number of these stakeholders. |
Executive Director City Planning and Design |
|
29 June 2022 |
Department – Senior Executive |
Department is proposing to lead a review and utilise a SEPP to amend CBD planning controls to the existing B3 zoned area to address commercial floor space capacity. |
Officers support this approach but consider it should be used to address concerns across a wider portion of the CBD. |
Executive Director City Planning and Design |
|
7 July 2022 |
Department – Senior Executive |
Department in response to issues raised by Council officers on 29 June 2022 are supportive of a second SEPP for certain B4 and B3 land. |
Officers support this approach |
Executive Director City Planning and Design |
Councillor Consultation
60. The following Councillor consultation has been undertaken in relation to this matter:
|
Date |
Councillor |
Councillor Comment |
Council Officer Response |
Responsibility |
|
11, 18 & 30 May and 15 June 2022 |
Councillor Workshops |
Councillors were broadly supportive of Officer positions about the Key Planning Outcomes but there were varying views on whether a SSPP moratorium should be supported |
This report has sought to address the concerns raised by Councillors. |
Strategic Land Use Planning Team |
|
6 July 2022 |
Councillor briefing session |
Councillors were broadly supportive of Council officer positions in regard to the SEPPs; and emphasised the importance of Department consultation with Council particularly in relation to the preparation of the study that will inform the second SEPP. |
This supplementary report has sought to address the concerns raised by Councillors. |
Strategic Land Use Planning Team |
LEGAL IMPLICATIONS FOR COUNCIL
61. There are no legal implications for Council in association with this matter.
FINANCIAL IMPLICATIONS FOR COUNCIL
63. The table below summarises the financial impacts on the budget arising from approval of the Council officer recommendations, as detailed in this report.
|
|
FY 21/22 |
FY 22/23 |
FY 23/24 |
FY 24/25 |
|
Revenue |
|
|
|
|
|
Internal Revenue |
|
|
|
|
|
External Revenue |
|
|
|
|
|
Total Revenue |
N/A |
N/A |
N/A |
N/A |
|
|
|
|
|
|
|
Funding Source |
|
|
|
|
|
|
|
|
|
|
|
Operating Result |
|
|
|
|
|
External Costs |
|
|
|
|
|
Internal Costs |
|
|
|
|
|
Depreciation |
|
|
|
|
|
Other |
|
|
|
|
|
Total Operating Result |
N/A |
N/A |
N/A |
N/A |
|
|
|
|
|
|
|
Funding Source |
|
|
|
|
|
|
|
|
|
|
|
CAPEX |
|
|
|
|
|
CAPEX |
|
|
|
|
|
External |
|
|
|
|
|
Internal |
|
|
|
|
|
Other |
|
|
|
|
|
Total CAPEX |
N/A |
N/A |
N/A |
N/A |
Robert Cologna
Group Manager, Strategic Land Use Planning
John Angilley
Chief Financial and Information Officer
Jennifer Concato
Executive Director City Planning and Design & Acting Chief Executive Officer
|
1⇩ |
Parramatta Local Environmental Plan 2011 (Amendment No 56) as made |
24 Pages |
|
|
2⇩ |
Amendment 56 Plan Finalisation Report - NSW Department of Planning and Environment |
63 Pages |
|
REFERENCE MATERIAL
