Warrnambool Standard (Victoria, Australia), August 17, 2007

DEVELOPER BLASTS COUNCIL

[Rachel's introduction: "The divisive issue is the introduction of new planning controls that apply a 'precautionary principle' to development outside the city centre. Brought in for two years, the measure restricts larger shops setting up in the city's east, effectively stifling Gateway's planned development."]

By Shane Fowles

The Warrnambool City Council has been accused of reneging on an agreed Gateway Plaza expansion that has cost developers about $8 million.

AMP Capital Investors (AMPCI) said the council had done a backflip on a land deal under which the company helped fund a $1.75 million council road project.

The company will meet with the council later this month to discuss the backdown prompted by Warrnambool's draft retail strategy.

All legal avenues are being kept open ahead of the high-level talks.

The revelations followed the firm's warning that its $60 million plan to bring Big W and Safeway to the plaza was seriously threatened by the retail strategy.

In the agreement, AMPCI paid half the cost of Gateway Road and ceded some of its land to the council.

In return, AMPCI agreed to rezone a 5100-square-metre block to allow retail development.

The land is essential to facilitate the $60 million plans to set up Big W and Safeway in the enlarged plaza.

That deal was struck in January after 18 months of negotiations.

When roadworks began in April, the council even cited the area's significant expansion in needing the upgrade.

Now, before the north-south route has even been built, the council has been accused of breaking its end of the bargain.

Having spent millions of dollars and years preparing for its major expansion, AMPCI is seething.

"The removal of those development rights via the imposition of interim planning controls... is unprecedented," its response to the council's strategy said.

"Such a radical departure from established council policy undermines investor confidence.

"That is an issue which AMPCI will be addressing appropriately beyond this response."

The divisive issue is the introduction of new planning controls that apply a "precautionary principle" to development outside the city centre.

Brought in for two years, the measure restricts larger shops setting up in the city's east, effectively stifling Gateway's planned development.

AMPCI claims it had no reason to foresee the eastern precinct development freeze which was imposed without warning.

Having been in talks for five years, the council never raised any concerns about AMPCI's expansion strategy or its purchase of additional land.

It was also fully aware that it needed a further 6000 square metres to facilitate its vision, AMPCI said.

The company now fears the investment and 1700 jobs will be forced into the hands of another south-west city because of planning mismanagement.

The city's chief executive officer, Lindsay Merritt, has previously said the next major anchor store's location would have a profound impact on the future of the city.

The council has long argued that the CBD is the city's primary retail area and its standing should be protected. Mr Merritt did not return calls to The Standard yesterday.