A planning law change to allow larger supermarkets at local shopping centres could end the impasse at the long-stalled Giralang Shops project, the site's owner says.
Dimitri Nikias, whose family has owned the site since the 1970s, said if the rule was changed, he could return to market to attract a supermarket operator to the site with a larger floor space.
He said the floor space limit at Giralang was not "100 per cent" the reason why the shop had not been filled, but the restriction had limited options for the site.
"It hasn't been a choice for me to market a larger supermarket to an operator who can compete against Kaleen," Mr Nikias said.
The nearby Kaleen Coles is 1700 square metres. The law change being pursued by the ACT government could allow a 1500-square-metre supermarket at Giralang, which is currently limited to 1000 square metres.
"I know that Giralang is a viable place to operate a supermarket from. I think the fact that I haven't been able to secure one is that those national firms are trying to compete against Kaleen, and Kaleen is twice the size," Mr Nikias said.
Mr Nikias said the current 1000-square-metre limit on supermarkets at local shops reduced supermarket competition in Canberra.
"One supermarket operator can compete against another one, but if you handcuff [one operator] because it's smaller, then he's not going to operate, he's not going to open," he said.
"Who loses? The community. The community doesn't end up getting a supermarket because it's possibly too small, so the supermarket actually can't compete against ... another supermarket close by, so the operator chooses not to try and compete because he's not in the same size floor plate as his opposition."
Mr Nikias will in May appear before a Legislative Assembly inquiry into the Giralang Shops, which was prompted by a community petition.
Community members have told the inquiry the lack of local shops for Giralang residents is disappointing and a "gross failure of planning and service delivery by the ACT government".
ACT Planning Minister Mick Gentleman in August 2018 used call-in powers to approve a development application for a mixed-use precinct at the Giralang shops site, including a 1000-square-metre supermarket and 50 apartments.
But Mr Nikias wrote to residents in April 2020 to say the project had stalled after a supermarket anchor tenant had not been secured.
Then planning minister Simon Corbell used call-in powers in 2011 to approve an earlier proposal for a Woolworths supermarket, retail outlets, cafe, restaurant and car parks, but the plans were never completed.
That decision prompted a bitter stoush between other local supermarket operators who launched legal action over what they saw as overdevelopment of the Giralang site.
Mr Nikias wrote to Planning Minister Mick Gentleman in March this year to reaffirm his commitment to developing a supermarket at the site and call for the "arbitrary" limit of 1000 square metres to be abandoned.
"This would be a simple and very welcome initiative by the government to greatly improve the prospects of attracting a suitable anchor tenant," he wrote.
Mr Nikias wrote that speciality tenants had been found for the smaller commercial spaces but a supermarket tenant had "remained stubbornly elusive (to our great disappointment)".
The floor-space limits have also been blamed for issues at the Coombs shopping centre, which was completed two years ago but has only ever had one tenant.
A change to planning laws in 2015 reduced the size of shops permitted on CZ4 land to 1000 square-metres, while it remained at a maximum of 1500 square-metres for stores on CZ5 land.
The government said at the time it was to "prioritise independent supermarket owners in smaller shopping precincts", but it has now begun work to reverse the decision.
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