Seniors Housing & Healthcare Trends

MELBOURNE: A retiree enclave profit is being jeopardised by a wrangle over a request for community contributions.

Mosman Park Council wants plans for a new mixed-use project on the former Tsunami restaurant site rejected because the developer is refusing to pay a larger community contribution.

But developer Brett Carboni said he would not build the eight-storey complex if the council insisted on increasing his contribution threefold or fourfold, saying the project would no longer be economically viable.

The saga has shone a light on community contributions in an era of inflated building costs and heightened community concern over high-rise development.

The Glyde Street project initially gained planning approval in May 2023 after Mr Carboni committed to a $172,000 package of public art and pavement upgrades to compensate for exemptions from planning rules that allowed greater height and bulk on the 750sqm block.

He had voluntarily committed to paying more than the $100,000 minimum required at the time to cover the cost of trees, public art, street furniture and improved paving.

But the project’s initial approval is set to lapse in May 2027 and the owner is now seeking a two-year extension after construction costs doubled from $10 million to $20m since the plans were approved.

The council said that since the approval, the town had adopted Local Planning Policy 36 — Public Art Contributions. It is understood the required contribution now stands at between $675,000 and $800,000.

Mr Carboni said he was seeking an extension of time only because of the difficulty in securing a builder willing to commit to a fixed-price contract. He said he had recently had a bad experience with a cost-plus contract but was confident building conditions would soon ease, allowing a widespread return to more favourable fixed-price contracts.

“I would not do it if the council charges me that much,” Mr Carboni said. “It is too risky. It is risky enough without that cost.

“I haven’t changed anything from the original plan. I am just seeking an extension of time.”

The approved plans are for an eight-storey development with two basement levels on the former Tsunami restaurant site in Glyde Street.

Once completed, the development would feature as many as nine hospitality venues, including sushi and teppanyaki bars, in the style of a Japanese yokocho, or alleyway.

The eateries would be operated by former staff from Mr Carboni’s Tsunami restaurant.

Mr Carboni said the council was short-sighted because it stood to gain greater rates revenue from each business, as well as from the project’s residential and short-stay apartments.

The council said in its submission to planning authorities that applying LPP36 would maintain the “integrity and equity of the local planning system”.

“If the town were to exempt this development from the public art requirement, it would open an avenue for discretion where certain significant projects are shielded from contributing to the district’s cultural character while newer applications are not,” it said.

“To ensure a fair and transparent approach, all significant developments currently seeking approval, including extensions of time, must be held to the same standards of public contribution.”

The council said officers did not have the discretion to support an application that did not satisfy the current requirements of LPP32, and said the original contribution now had diminished purchasing power.

“It is unlikely that the current community benefits package will be able to deliver the same level of community benefit as was contemplated at the time of the original approval due to rising costs of labour and materials,” it said.