06 April 2010
In our Member Alert on 15 March 2010, we informed you about $1.8 billion in projects that the NSW Department of Planning had refused Part 3A status since new rules began in July last year.
Since then there have been further discussions with the Department where they have elaborated on their position. The Director-General, Sam Haddad, has also written to the Taskforce.
In essence it appears that the Department of Planning accepts that it has no right to knock back a Part 3A application “at the counter” (so to speak) where the project is not prohibited under an environmental planning instrument. A development which departs from development standards, but is other permissible, is not regarded as “prohibited”.
However, the Department now says that, even after changes in July 2009, it always intended to retain full discretion to knock back prohibited or partly prohibited development. It does this by exercising its discretion to refuse a proponent authorisation to apply for approval of a concept plan. If such an authorisation is not granted, the regulations prevent a project approval from being issued, and therefore the Part 3A application cannot proceed.
Our concern is that a sleight of hand has taken place. In a series of discussions with industry in the first half of 2009, the Department of Planning maintained that all discretion would be removed from the process of conferring Part 3A status on residential, commercial and retail projects worth $100 million or more. They were attempting to get industry support to lift the threshold for Part 3A projects from $50 million to $100 million. The Urban Taskforce did not give its support for the lifting of the threshold, however the Property Council did so.
It turns out that only a small number of Part 3A projects will now have automatic Part 3A status, while many of those projects that require a rezoning to proceed are stuck in a discretionary hole. The criteria are now completely unclear, with the previous test of “state or regional significance” being deleted in July, and no new equivalent test created.
In short, the July 2009 changes were more adverse to the development of NSW than the Department communicated at the time.
Mr Haddad has informed us that “consideration [for Part 3A status] is explicitly not based on ‘political controversy’ or the degree of difficultly involved in dealing with a development proposal”.
However, Mr Haddad also says that “the Department will not recommend the authorisation of a Concept Plan to overcome a prohibition unless it is convinced that the proposal has merit and a reasonable chance of successfully negotiating the Part 3A assessment process”. This statement sheds little light on the actual basis of such a decision.
The Urban Taskforce never asked for the Department to be denied discretion on conferring Part 3A status to projects. That was something the Department told us (and others) it wanted. It is now singing a different tune. Our concern relates to the inappropriately high threshold ($100 million) for Part 3A status and the increased reluctance shown by the department to accept new retail, commercial and residential projects into the Part 3A process.
The Department’s recent written response to the Urban Taskforce is available here.
It is worth noting that the Department, in its letter, suggests that we had mistakenly indicated that three matters under consideration, including the Coogee Bay Hotel redevelopment, had been refused. This is not correct. These three projects were not included in the $1.8 billion worth projects we identified as being knocked back.