Plan to shrink Killalea 'is no sweetener'

The commercial development at Killalea State Park looks set to be scaled back, but opponents say the resort would still ruin the iconic surf destination.The Mercury understands the developer has submitted new preliminary plans for significantly less units than the 202 proposed for The Farm. While it has not been made public, sources close to the development confirmed yesterday the plans had been changed.Last April, NSW Lands Minister Tony Kelly signed an agreement to lease three chunks of parkland for 50 years to Killalea Coastal Investments, a joint venture by Babcock & Brown and Mariner Financial, to build 202 strata-owned units, a conference centre, tennis courts, swimming pools and restaurants. Opponents have previously speculated that Babcock & Brown's financial woes threw doubt over its plans for Killalea.More than 12,000 signatures opposing lease of the Crown land were tabled in NSW Parliament last year.The Sydney-based Environmental Defenders Office has taken on the battle to stop the lease and will launch legal action once a development application is lodged.The development was intended to span three separate areas of the park.Two were on the ridge overlooking The Farm beach, and one was in the gully near the camp ground.The developer is understood to have dumped this western gully site, where the bulk of the units were to be housed. Instead the more valuable chunks of eastern parkland will be the focus.Melbourne lawyer Susan Bunting has been actively opposed to the lease since it was made public last year.She was a legal adviser to Neville Wran's government when the then Premier designated Killalea a State Recreation Area.The Minnamurra property owner said less units did not change the fact that the Government's first commercial leasing of a state park "alienated the land" from the public."The one in the gully is really not the prime site. It's the site for campers, it's already developed. The significant thing is they're not changing anything in relation to the two prime sites," Ms Bunting said.She expected the development would still attract major project status from the Government."It's unlikely that removing one part of the development would necessarily reduce the environmental impact, which is one of the considerations for deciding if something is a major project," she said.The company has been in discussions with the NSW Department of Planning since last year, while it processes its application to be considered a major project, assessed by the State Government instead of Shellharbour City Council.The Mercury asked the department yesterday to confirm that it was considering plans for a scaled back resort.A spokeswoman said no decision had been made as to whether a proposal would be considered a major project to be assessed by the department."As a result, it is appropriate that comment about the current nature of the proposal come from the proponent," the spokeswoman said.Killalea Coastal Investments spokesman Peter White said the company would not comment on details until a final proposal was ready. He said the plans were with the department.Albion Park resident Sonya McKay thought the scaling back of the resort could mean it is assessed by the council instead of the government, and had contacted Shellharbour's new administrator to arrange a meeting.She understood concerns about a state-protected wetland in the vicinity of the gully site had influenced the changes.The Government's plans to sell the long-term lease for the parkland attracted such concern in the Illawarra last year that the South Coast Labour Council slapped a green ban on any construction work.Secretary Arthur Rorris said news of the shrunk development was no surprise, and no sweetener.He said Babcock & Brown's instability had put the Killalea proposal on shaky ground, but developers also typically went larger than they wanted, "then par it back if they know there's opposition", he said."But the principle's still there - they're looking at public land. They're looking at 52-year leases with strata subdivision."He said if the Government wanted to simply raise some cash to help maintain the park, it should develop just the gully area that already contained some buildings."But there's no money in that for investors who want to sell off the land."The lease agreement allows for the company to sell strata leases to investors.Mr Rorris said the apparent change would not abate the groundswell of opposition to the lease.