When Giralang’s supermarket doors closed in 2004 the echo was long and loud. First residents, then rival supermarkets complained about the proposed re-development.
Then Woolworths entered the fray, followed by then chief minister Jon Stanhope whose row with chief planner Neil Savery grew so fierce the bureaucrat left Canberra and the public service was overhauled.
Planning Minister Simon Corbell says the proposed new supermarket’s size, and not Woolworths, caused Stanhope and Savery’s rift.
Stanhope wrote to his planning minister (then Andrew Barr) in early 2010, asking him to tell the planning authority about the very great importance of the supermarket policy, and later told Land and Property chief David Dawes that Giralang’s size worried him and that he felt for IGA owners and their families throughout Canberra. He was worried that if its larger format was approved it would set a precedent.
Savery complained of interference, recommended the project be called in and later Corbell, re-appointed as planning minister, did just that, and found there was nothing to stop Giralang from going ahead.
His subsequent approval led to an unprecedented Supreme Court challenge from neighbouring IGA supermarkets. They believe a retail hierarchy restricts the size of supermarkets in local suburban centres, and that Giralang was pushing the boundaries.
Earlier this month Supreme Court Justice John Burns dismissed their challenge. He found Corbell, the planning agency and developers were right.
This means the Nikias family, which bought the shopping centre site in 1976, can proceed with a supermarket bigger than other supermarkets in small suburban shopping centres. It’ll be the first to have basement car parking at a local centre. Some speciality shops, a cafe, and restaurant will also be developed. Woolworths will be the main tenant.
The losers are appealing.
Some planners and legal types reckon throwing the retail hierarchy out will cause chaos, while other planners think the court’s finding exposes the bare bones of a hierarchy that’s so flexible, a bit of retail muscle can be added here and there to respond to shifting market conditions without breaching the intent of planning laws.
Planning Institute of Australia’s ACT president Viv Straw says describing the retail hierarchy as a fiction is probably too strong, but it’s not the absolute document many thought it was until this case arose.
‘‘It changes the paradigm. There is no actual legislative requirement to stay within that hierarchy, there’s nothing that says a developer can’t come along and say, ‘Well actually I want to build something much bigger on some other site and develop that site’.’’
While the court case pitted independent supermarkets against a developer accommodating Woolworths, the territory’s supermarket competition policy did not have a role.
Corbell says people often get confused about the policy which sidelines Woolworths and Coles from certain sites and allows direct sales to other supermarkets. The policy’s control levers are applied through land release, not planning.
‘‘That’s the tool we use to try and encourage greater competition in the market. We don’t actually use the planning system – i.e. the development approval system – to deal with competition because the development approval system is basically neutral about who owns or runs a supermarket.’’
Supabarn owner Eric Koundouris has long tried to build enough scale to take on Woolworths and owns a group-centre-sized supermarket at Kaleen which will feel the brunt of Giralang’s resurgence.
He wasn’t among the independents to mount the Supreme Court challenge. He’s still mulling over its consequences and is yet to comment. He warned in 2009 the government should not be rewriting the Territory Plan to accommodate Woolworths who, he said, already had 80 per cent of the Canberra market.
‘‘Giralang deserves a quality local shopping centre and should have it, provided it is a local shopping centre as defined by the Territory Plan,’’ he said at the time.
Among expert witnesses on opposing sides of this case were two consultants well versed in Canberra’s parallel planning system which comprises the Commonwealth’s National Capital Plan and the ACT’s Territory Plan. The IGAs engaged retail analyst Peter Leyshon. Nikias had earlier enlisted urban planner Claire Middleton. Both worked at the National Capital Development Commission, which preceded the National Capital Authority.
Leyshon says a hierarchy of centres has been the cornerstone of retail planning in the ACT since 1958. Middleton counters this, saying the dynamic nature of retailing has blurred the edges of a previous clear separation of various levels of commercial centres.
Middleton says most local shopping centres were planned close to schools and within walking distance to homes and date back to when fewer women were in the workforce, fewer people owned cars and most significantly, before trading hours were deregulated. She says the NCDC was persuaded that the way of the future was drive-in, supermarket-dominated convenience centres, at the expense of neighbourhood centres.
But the commission thought it was such a drastic departure from established patterns it created several tiers of shopping centres, including group centres.
Middleton says Giralang meets the ACT government’s fresh retail objectives to stimulate investment and employment while matching community needs. She says a key principle of the National Capital Plan is a hierarchy of centres, but qualifies this. ‘‘In the matter of the urban form, size or range of land-use activities to be provided at other levels of the hierarchy, the plan is silent,’’ she says.
Straw, who has 18 years experience in NSW local government and has been a planning consultant in the territory for six years, says laws alone don’t shape the size of shops.
‘‘A large centre is like a stronger magnet, it is going to draw more things towards itself than a smaller centre, and that’s what really keeps the hierarchy in balance.’’
He says the question often comes down to whether a business can afford a big enough anchor to pull enough people away from other centres and that’s why smaller centres around Giralang are worried. They have to reconfigure what they do and how they do it to meet competition head on.
Middleton says 15 years after Giralang neighbourhood centre began, Kaleen shops opened with discount supermarkets which drew about 50 per cent of new business from the Giralang area. From then on the smaller centre struggled and eventually closed. Other local centres have gone the same way. She says that’s competition.
Alan Bradbury of Williams Love and Nicol who represented the IGAs in their Supreme Court challenge, says the competition Middleton refers to came from a strategic planning process where Kaleen was identified as being a group centre, that envisaged a supermarket the size of Supabarn’s opening there. This hasn’t been the case with the local centres.
‘‘It’s a fundamental change, you end up with supermarkets the size of this one going into local centres where it’s by far twice and probably three times the size of a lot of the supermarkets in local centres in Canberra,’’ he said.
‘‘If we are going to have such a fundamental change in the hierarchy it ought to be done through a change to the Territory Plan, and not in an ad hoc development application that just proposes something that is inconsistent with the hierarchy and dealt with as a one-off thing.’’
Corbell says the court challenge was under the Administrative Decision Judicial Review Act, and unlike an appeal under the Planning and Development Act, required a tougher and higher test.
He says Justice Burns’ decision is significant because it makes clear that an impact on commercial interests isn’t sufficient grounds to give standing in the court. After all, competition is part and parcel of a market place.
‘‘That’s a welcome decision by the court because we have seen developers seek to use judicial processes to frustrate the commercial aims of their rivals, and that’s not the role of the planning system and should not be the role of a review of planning decisions either.’’
Bradbury doesn’t see it this way. He says one of the earlier decisions relied on for determining this case had ruled that someone bringing proceedings needed to show a special interest over and above the interests of the general public.
‘‘You’ve got to ask yourself whether it is fair to say that people who run businesses in the nearby shopping centres don’t have such an interest. I would have thought they do. But the judge obviously disagreed.’’
He says the question of standing is an obstacle in the ACT which doesn’t exist in a lot of other jurisdictions.
Throughout the planning battle Nikias has engaged Chris Wheeler, a partner at King and Wood Mallesons. Wheeler says work will begin on the new shopping centre once the developer has met all the conditions of approval. And when the appeal is settled.
Wheeler says not only did Justice Burns finds the IGAs had no standing, he considered all the other grounds, and caned them on those as well.
‘‘So the substantive grounds that, can you use ADJR to the Supreme Court as a back door way of re-opening planning decisions, the court has basically closed the door on that.’’