Previous Council Report

BACKGROUND

(1) The Council has been approached for over a year by the owner of 51 Phillip Street Parramatta (the applicant) to negotiate sale of part or whole of the adjoining Council land at 49 and 53 Phillip Street Parramatta for combined redevelopment of the applicant’s property for a hotel.

(2) Currently the Council land at 49 Phillip Street is used for open space and the Council land at 53 Phillip Street is a pedestrian laneway. Both these land parcels are zoned “B3” Commercial Core on Council’s City Centre Local Environmental Plan and have a floor space ratio of 6:1 when consolidated with the applicant’s property.

(3) A concept hotel redevelopment proposal was submitted for consultation with the Council. After consultation with Council internal stakeholders, the following recommendation has been put forward among others for negotiation with the applicant:

49 Phillip Street – This is the only public open space available in Parramatta CBD and sale of this land parcel is not recommended. However the applicant may upgrade at his costs this open space in line with Council’s urban design strategy to complement the hotel development. Use of voluntary planning agreement has been suggested for the applicant to upgrade the open space and possibly use part of it for outdoor dining for the hotel.

53 Phillip Street – Council officers have no objection to closing this pedestrian laneway for sale to the applicant.

(4) The applicant has agreed in principle to purchase the laneway subject to terms of sale and price to be negotiated.

(5) For reference, a location plan showing the properties is attached. Also attached are drawings submitted by the applicant on the concept hotel development.

ISSUES/OPTIONS/CONSEQUENCES

(6) The subject pedestrian laneway was part of a larger parcel known as Lot 2 DP 200769 resumed by the Council in 1978 for road purpose. At the time of resumption, this larger land parcel was a private legal right of way providing access for adjoining properties known as 49 & 51 Phillip Street nowadays.

(7) In 1979, Lot 2 DP 200769 was subdivided to create the current laneway parcel (Lot 2 DP 601592).

(8) Accordingly a formal permanent road closure under Roads Act 1993 is required to remove the public road status of this land parcel. It is also necessary for the Council to classify this land parcel upon formal road closure to operational under the Local Government Act 1993 to facilitate sale.

(9) Services including Council storm water drain and Telstra phone lines are found within the pedestrian laneway. In addition, the pedestrian laneway provides access to the fire hydrant booster valve (the door of which opens onto the pedestrian laneway) of 55 Phillip Street. All these need to be protected by creation of easement prior to sale. Pedestrian use of this laneway will also be maintained by creation of an easement.

(10) Obviously such easements when created would preclude building development on the land for the laneway and have serious limit on sale value if sold for development on its own.

(11) Accordingly it is recommended that Council should consider selling the subject pedestrian laneway to the applicant for combined redevelopment to achieve the maximum sale value, as the applicant can take full advantage of floor space ratio available for the consolidated site to increase the floor space of building development on 51 Phillip Street.

(12) The other adjoining property at 55 Phillip Street is a strata titled property in separate ownership with no possibility for combined redevelopment with the subject laneway.

(13) On the basis of sale to the applicant, the value of the subject pedestrian laneway is considered to be in the vicinity of $650,000. A final sale price will be determined when the laneway is legally closed and the Council is in a position to sell.

(14) While the Council’s open space at 49 Phillip Street is not for sale, the applicant is prepared to negotiate an upgrade at his costs and to Council’s urban design requirements the Council open space to complement his hotel development. Use of voluntary planning agreement may be adopted to negotiate terms including additional floor space for the proposed hotel development.

CONSULTATION & TIMING

(15) The Council’s Development Services Unit, Urban Design Unit, Transport and Safety Unit and Catchment Management Unit have been consulted in the course of negotiation with the applicant.

SUMMARY

(16) In summary, the applicant has proposed to consolidate the Council land at 49 and 53 Phillip Street with his property at 51 Phillip Street for hotel redevelopment. The following major considerations on the proposal have been identified after meetings and discussions between the applicant and Council officers:

49 Phillip Street

(17) Sale of this Council land is not recommended, as this is the only open space land parcel available in the Parramatta CBD. This Council land parcel has the potential to establish a formal identity at Phillip Street for the Erby Place car park site when the time comes for its redevelopment. It also provides additional floor space for the Erby Place car park site when amalgamated for redevelopment. In this connection, the current rear access at Erby Place for 55 and 69 Phillip Street needs to be replaced by access from Horwood Place.

(18) This has been acknowledged by the applicant who now intends to negotiate with the Council to upgrade at his costs this open space to complement the hotel development including leasing part of the open space land if possible for outdoor dining use. Use of voluntary planning agreement has been suggested.

(19) Negotiation will be further progressed when applicant is able to make a decision to purchase the Council laneway to proceed with hotel development.

51 Phillip Street

(20) The concept hotel development proposal has been considered by Council officers and found to be deficient in areas of planning control and urban design principles. The applicant is going to review the hotel design taking into consideration the comments of the Council officers.

(21) The applicant has asked for and been provided an indicative sale price for the Council laneway at 53 Phillip Street to review the feasibility of the hotel project. Obviously sale of the Council laneway will not proceed if the hotel project turns out to be not financially feasible.

53 Phillip Street

(22) This laneway provides a pedestrian link between Phillip Street and the Erby Place car park. Easements will be created on the title of the land prior to sale to maintain access for the adjoining 55 Phillip Street to its fire hydrant inlet at the laneway, to protect Council’s existing storm water drain and to maintain current pedestrian access.

(23) The Council officers have no objection to closing this laneway for sale to the applicant who is the only party able to utilise the floor space due to the laneway land for additional floor space building development at 51 Phillip Street.

(24) The applicant has agreed in principle to purchase this laneway subject to terms of sale and price to be determined. As closing the laneway under the Roads Act takes at least a year to complete, it is highly recommended that Council while having negotiation with the applicant on sale terms and price should take parallel action to proceed with road closing. There will not be any adverse affectation on use of the laneway if sale fails to proceed following formal road closing.

FINANCIAL IMPLICATION FOR COUNCIL

(25) Council may receive revenue in the vicinity of $650,000 (subject to final valuation) in the disposal of the pedestrian laneway.

(26) Council may also receive an upgrade at applicant’s costs to Council’s open space at 49 Phillip Street. Details of the upgrade works are yet to be determined and negotiated.

Kwok Leung

Property Program Manager

1	Location Plan	1 Page
2	Concept hotel development	2 Pages