Investigation into allegations of collusion with property developers at Kingston City Council

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Foreword

It sounded off alarm bells that essentially, a single senior planner has had a twenty-five year relationship with a single developer within one Zone and we’ve ended up with something very, very different than what the panel had in mind when it was first committed to be zoned in that way.

Local resident in interview with Ombudsman

This investigation has its origins in public concerns about the development of land within their community. This is an issue that affects many, if not all, councils and communities, where there will be bitterly divided views, often changing over time, about whether the advantages of development outweigh its disadvantages.
This report is the story of one development in south-east Melbourne, within what is now Kingston City Council. It began simply enough – a new vision for the Patterson Lakes marina area. What the community ended up with was very different from the original plan – bigger, higher, less accessible.

Planning started in 1988, and the published plan was to encourage ‘a marina-based mixed-use area’, to be used for boating, as well as residential, tourism, entertainment and greater public access along the riverbank. A later iteration of the plan shows a marina, restaurants, offices and residences with heights of two to four storeys, car parking and open space.

This report makes no value judgement about the reality in 2021, but it is undoubtedly different. Alongside the marina are multiple residential buildings, with two of ten storeys planned. A six-storey residential development stands where a car park was shown on the 1999 plan. The Patterson Lakes riverbank is largely inaccessible to non-residents outside business hours.

Little wonder then that some locals were suspicious, even to allege corruption by Councillors and Council staff, particularly in the aftermath of IBAC’s public hearings in 2019 examining an allegedly corrupt relationship between local councillors and developers.

Witnesses told us bribes and kickbacks were ‘common knowledge’, ‘coffee talk’ around the Marina, but acknowledged they had no evidence. Two reviews commissioned by Kingston Council did not find evidence of corruption. Nor did my investigation find any deliberate impropriety beyond undeclared Christmas lunches at expensive restaurants.

But corruption is not always the explanation for changing development or over-development, depending on your perspective. Several factors contributed to what, for many in the community, was an unsatisfactory outcome.

Some of these were individual failings, some more systemic or structural.

Incompetence or negligence by the Council’s senior planner or lack of rigour in decision-making; combined with such poor record-keeping, it was difficult to form a view on whether decisions were improper, non-compliant or simply deficient. The perception of conflict of interest was aggravated by the planner accepting, without declaring, the developer’s hospitality.

In just one example, a planning report to Council misdescribed a five-storey building as a three-storey building. This was acknowledged to be ‘a mistake that no one had picked up’ – ‘planning officers had relied on the report of the traffic consultant … without having proper regard or referencing back to the plans’.

Mistakes have consequences: as a result of approvals being given on incorrect information, later approvals were given to increased height levels. In other instances, the impact on visitor parking and traffic flow and the ambiguity of height controls, were not considered in reports to Council meetings.

The consequences were all the greater because the area is a Comprehensive Development Zone. A key aspect of this form of planning control is that planning permits are not required and consent is exempt from public notice provisions. Locals raised concerns about this back in 1989 – but a Ministerial panel, acknowledging the difficulty, felt the detailed nature of the Concept Plan meant that actual development would be ‘unlikely to differ materially’.

While such development zones no doubt have a useful place in planning schemes, in the end the community appears to have had the worst of both worlds: neither the adherence to the original plan nor the chance to object.

Another aspect that will no doubt surprise many locals is that Council’s original contract with the developer – a standard provision in such contracts - allowed the developer to satisfy the open space requirement by making a monetary contribution based on the value of the land. So, land identified as public open space on the original plan was in effect sold to the original developer in 1990.

The overall impact of concessions and agreements on such matters as height controls, parking spaces and public space was gradual, uncoordinated erosion of an earlier vision. Council’s lack of strategic oversight effectively allowed the area to develop in line with the developer’s objectives rather than the original plan.

While Councillors, too, came into the frame, the evidence was of discord and dysfunctionality, rather than corruption. The philosophical and political differences within Council on development in the ‘Green Wedge’ were and remain highly contentious but should be resolved around the Council table as far as possible, in the public interest.

Once again, poor record-keeping, combined with loose application of ‘call in’ powers for when Councillors become involved in planning decisions, can give rise to perceptions of corruption.

This investigation makes no findings about the legality of Council’s decisions, some of which are subject to review by VCAT; or criticism of the developer, who will inevitably seek to maximise its return to shareholders. It falls to public officers to ensure this does not happen to the detriment of the public interest.
I am tabling this report not to expose any serious misconduct but because the community deserves answers, where possible, about what has happened in their neighbourhood and why.

The senior planner is no longer employed at the Council. Kingston Council has committed to implementing the recommendations of its two reviews, which should address the systemic issues identified in my investigation.

Whether they address the perceptions of corruption and conflict will ultimately depend on the behaviour of individuals, and on strong, ethical leadership. Development may always be a contentious issue for councils and their communities, but with transparency and good governance it should not be seen to undermine public trust. Councils everywhere would do well to take note.

Deborah Glass
Ombudsman