Port Phillip Council’s decision to scrap the contentious plans to redevelop St Kilda’s foreshore has caused outrage in the development industry.
Mayor of Port Phillip, Frank O’Connor, last night binned the $300 million project, calling it a “dinosaur” and saying it did little to curb carbon emissions.
The City of Port Phillip will pay Sydney-based developer Citta Property Group $5 million in settlement fees over three years.
Since winning the project in May 2007, Citta claims to have invested $12 million in the scheme and so still stands to lose $7 million.
The decision has provoked anger from the development industry, which says it sends a “terrible message” about the viability of investment in architecture in the state.
Port Phillip Council was “incapable” of managing a major project, Master Builders Association said.
“These sort of high-profile investment disasters send investors packing to other more responsible states,” MBA executive director, Brian Welch, said.
“Years of effort and millions of dollars have been lost on this mess.”
The state government needed to get more involved in planning if it is to protect investment opportunities, he said.
The design team, led by Ashton Raggartt McDougall, along with Grant Amon Architects and Lyons Architects, will miss out on the iconic project.
The triangle project faced fierce opposition from residents’ groups, such as unchain St Kilda, which were against its size and scale.
While community groups have called the termination “a sensible decision to cut further losses”, former councillor Dick Gross estimated that taxpayers could lose a further $80 million in lost rent and rates if the site stands empty for the next 10 years.
A report commissioned by the council last year found the redevelopment would inject about $600 million into the area.
The development, on the site of a carpark, included the refurbishment of the 3,000-seat Palais Theatre, along with two new major event spaces that would have been linked by a series of lanes, promenades and walkways.
The 15,000sqm of public space would have been controlled and managed by the City.
Council will formerly vote on the termination of the project on 14 December. However, six out of the seven councillors have indicated they would support cancelling the agreement.
