EXCLUSIVE

Liberal Party treasurer among losers in Fishermans Bend planning carve-up

A skyscraper proposed by the Liberal Party's federal treasurer is among the apartment towers set to be rejected by the Andrews government under strict new planning rules for the troubled Fishermans Bend development precinct.

But the new rules, to be introduced on Monday, fail to address affordable housing, one of the key criticisms of the former Baillieu and Napthine governments' handling of the area's redevelopment.

New height limits for Fishermans Bend

CCTV: Thieves break into Footscray optometry shop

Juveniles face adult prison after Parkville riots

Vic government extends South Morang line

Victoria in for an infrastructure boom

Dramatic police chase ends on West Gate

Victoria's crime rates by postcode

Offenders riot at Parkville Youth Justice Centre

New height limits for Fishermans Bend

Some apartment towers proposed for the development precinct will be rejected under the government's strict new planning rules.

The rules will likely scupper seven high-rise towers, a handful of those proposed after former planning minister Matthew Guy in 2012 controversially rezoned 250 hectares of industrial land south-west of the CBD and dubbed it Fishermans Bend.

Another 11 towers are expected to be sent back to the drawing board for minor redesigns

The taller towers in orange are set to be cut down in size under new planning rules for the Fishermans Bend area.

Mr Guy's snap rezoning, without height or design controls, triggered a multibillion-dollar hike in land values and windfall profits to landowners without a cent captured for the wider Victorian community or for infrastructure in the area.

It sparked a frenzy of applications for apartment towers with almost 50 proposed since, some reaching more than 60 storeys.

The new mandatory new rules will set heights of between four and 40 levels, with taller towers allowed in more industrial areas and in streets facing onto the West Gate Freeway. Lower heights will be apply in areas abutting existing neighbourhoods. Other rules specify the height of street walls, the setback of towers from the street, and building separation distances.

Developers with proposals before the government will be given four weeks to rework their schemes.

The rules will be contentious with some developers because they will be used to retrospectively assess high-rise schemes proposed in the "wild west" period after Mr Guy's rezoning of the land. Back then, there were no height or design controls.

The new rules will apply to all projects proposed since 2012 but not yet approved.

Planning Minister Richard Wynne said land speculation had been rife in Fishermans Bend with developers buying sites, and further boosting their value by winning permits for towers.

Some sites had been "flipped" (on sold) since 2012, making big profits for their original owners, without a brick being laid.

Despite the apparent urgency of Mr Guy's overnight rezoning of the land more than four years ago, only two projects – the 29-level Gravity Tower by developer Blue Earth and a low-rise 256-townhouse project – are under construction.

Mr Wynne said developers with well-planned projects in "neighbourhoods with some longevity" would receive permits to build in what is Australia's biggest urban renewal project.

But he warned that land owners who wanted to sell approvals "for maximum profit with no regard to the long-term outcomes will have to work a bit harder".

Victorian Property Council executive director Sally Capp said the speculation at Fishermans Bend made it "an unusual situation" and that clearer rules were needed.

She said almost all the current proposals at Fishermans Bend were for apartment towers. This is because residential development delivers the biggest returns for landowners and developers. The government needed to encourage office and commercial projects, she said.

In November 2015 Fairfax revealed Liberal party treasurer Andrew Burnes was among a slew of Liberal figures and donors to reap multimillion-dollar windfalls as a result of Mr Guy's ministerial pen stroke.

Burnes – also a generous Liberal donor – paid just over $7 million for a site in Normanby Road, South Melbourne, in March 2012, only four months before Mr Guy's surprise rezoning of the land.

Property experts have estimated the rezoning alone boosted the value of the Burnes site to $20 million.

Fairfax Media is not suggesting any inside knowledge or wrongdoing on Mr Burnes' part.

In May, Mr Burnes applied to the government for a 40-level apartment tower. Approval would have dramatically enhanced the value of the site further.

Fairfax Media understands the Burnes tower is at odds with the new setback rules and would not be approved in its current form.

Another scheme linked to Liberal donor John Ayre – five towers proposed for Ingles Street, Port Melbourne – also faces rejection in its current form. It is now on hold at the request of the proponent.

Mr Wynne denied the new rules were in any way aimed at the Liberal-connected landowners.

The Andrews government released a "draft vision" for the Fishermans Bend precinct in June and a more detailed planning framework is due in late 2017.

A local group lobbying for better planning for the new suburb, the Fishermans Bend Network, originally called for a hold on large developments until Labor finalised its plan for the area.

But Mr Wynne continued to approve towers ahead of the introduction of a new planning framework, or rules. He has approved more towers at Fishermans Bend than Mr Guy did.

In November 2015 Fairfax Media revealed that, as planning minister, Mr Guy shunned departmental advice that he "require" affordable housing in large-scale residential projects at Fishermans Bend.

Labor's ministerial advisory committee on Fisherman's Bend last year called on the Andrews government to "ensure" affordable housing in the precinct.

But to date Labor has done nothing to address affordability. The new controls will only "encourage" developers of larger residential projects to allocate 6 per cent of apartments for social housing. There is neither requirement, nor clear incentive, for them to do so.

The opposition's planning spokesman David Davis said the rezoning of Fishermans Bend while the Coalition was in government was something it stood by.

"[We are] proud to have rezoned this site," he said, because it would "bring so many jobs and potential new homes to a city that desperately needs both".

And he attacked Labor's lack of action on affordable housing: "[The government] has done nothing about it; housing affordability is getting a lot worse under Daniel Andrews."