The owners of a Manuka site at the centre of a planning stoush over a protected tree say the decision to keep it will prevent the block's redevelopment.
Sotiria Liangis and her son, John Liangis, said the decision to keep the tree on the register had played into the hands of unrepresentative residents' groups trying to stop renewal on the prominent block.
Mrs Liangis had plans approved for the first stage of a hotel development on the site pending a decision on the tree, which she said should never have been protected.
But on Wednesday, the conservator of flora and fauna, Ian Walker, decided to keep the tree on the register after Mrs Liangis asked for it to be struck off, ignoring advice from the the ACT's planning authority.
"Manuka, it's home. We're not there to make big money and move away. We're losing money and still trying to help," Mrs Liangis said in a rare interview.
"We don't want to see any other glass screen [facade] on Canberra Avenue. Because every single building is a glass screen. Our place is completely stone. It's actually beautiful to look at it," she said, speaking of the family's hotel plans.
Mr Walker found there was a "suggestion that the roots of [the tree] may be growing into sewage pipes, there is no evidence to indicate an impact to services".
"I am unable to find that [the tree] is causing substantial damage to a substantial service that will require ongoing and extensive remediation measures," Mr Walker wrote in reasons for his decision.
Mr Liangis said Mr Walker inspected the site and damage to the sewerage pipe in July 2018.
Photographs taken by The Canberra Times on Friday clearly show a root from the tree breaching a pipe along the easement.
Mr Walker told The Canberra Times he was not qualified to assess "substantial damage to a substantial building, structure of service" and relied on technical advice he received.
The ACT Planning and Land Authority, now the Environment, Planning and Sustainable Development directorate, advised Mr Walker that a significant part of the block could remain undeveloped if the tree stayed.
Mr Walker also found there was no basis to the authority's advice that there was no realistic design alternative for the site if the tree remained.
Mr Walker did not reconcile contradictory reports on the tree's impact on the structural integrity of the cinema building, but noted the Tree Advisory Panel said there was a need for more information from a structural engineer.
A May 2018 report prepared for Mrs Liangis found the tree's roots grew towards the building and had caused cracking, while a report prepared by John Skurr Consulting Engineers found the cracking was not structural and the roots did not consistently grow in the direction of the wall.
"I cannot be satisfied that [the tree] is causing substantial damage to a substantive building or structure that will require ongoing and extensive remediation measures," Mr Walker said.
A report prepared by prominent Canberra arborist Alan Mann for Mrs Liangis in October 2016 found the tree was likely planted between 1970 and 1975 but had grown large because it was fertilised in the easement.
"It is also likely that the sewer leaks and roots have entered the sewer line. There are reports of blockages and the need to clear this sewer," Mr Mann said in the report.
Mr Mann found remediation was impractical given the root structure and the size of the site.
"The location of the tree 1.1 metres from a wall of a major building and in a sewer easement is inappropriate for a tree of its potential size. The tree should be removed," he said.
An investigation by the ACT government's tree protection unit found a drill hole in the trunk of the tree in March. The investigation, which could not find a culprit and did not detect the presence of poison, ended in April.
Mrs Liangis said she had called an arborist in February to assess the health of the tree after Mr Liangis noticed signs of deterioration.
When the arborist found the drill hole, Mrs Liangis reported the alleged vandalism to police and Mr Walker, who was then considering the tree's registration.
The Canberra Times understands a member of the public lodged an incomplete form to nominate the tree for protection on December 13, 2010.
An initial assessment three days later found that while the tree "provides aesthetic and environmental benefits", the tree was "not located in an ideal position".
The site has had a controversial history. The 1927 Capitol Theatre was demolished in 1980. Mrs Liangis bought the redeveloped site in 1989.
Mrs Liangis said she cried when the original theatre was torn down and hoped to bring renewal to the area with the hotel.
"When I was still working around Manuka and I hear the building is down, I was crying because I loved that building. It was old ... I just loved that architecture.
"What we tried to replace [the current cinema] with is to restore a bit of [the old architecture] to Canberra," she said.