Yesterday's decision paves the way for Lend Lease's plans for 4800 dwellings and 50 hectares of mixed-use land in the Calderwood area to be developed over the next 23 years.

In handing down their judgment, commissioners Tim Moore and Susan O'Neill yesterday declared they would uphold Lend Lease's appeal against rejection of the first stage, however, orders will not officially be handed down until August 29 after "consolidated conditions of development" are filed by the parties involved.

BLOG: Calderwood, the way of the future

The overall Calderwood project was granted concept approval by former Labor planning minister Tony Kelly in 2010.

Despite concept plan approval, Lend Lease's plans were dealt a blow last year when the proposed first stage, comprising 231 residential lots and 120 medium-density dwellings, was rejected by the Planning Assessment Commission (PAC) because the proposal exposed future residents to flooding, leapfrogged established land release plans and was not in the public interest.

The application had been referred to the independent PAC after it was revealed a departmental "oversight" meant $48,000 in donations from Lend Lease to the previous Labor government had not been made public.

Lend Lease appealed against the PAC's decision and in February this year the PAC performed what was described by Kiama MP Gareth Ward as "an outrageous backflip" just weeks before court hearings were due to take place.

Following the submission of "expert advice" presented as part of the court proceedings, the PAC said it was now satisfied that the stage one project may be approved subject to appropriate conditions, including conditions relating to flood mitigation works, development control guidelines and contributions towards local infrastructure.

Once that decision was made critics of the project believed approval of stage one was a foregone conclusion and yesterday Land and Environment Court commissioners indicated as much in handing down their judgment saying the main issue to be resolved by the court was infrastructure contributions.

For years Shellharbour and Wollongong councils and members of the community had argued the Calderwood development was inconsistent with the Illawarra Regional Strategy which said West Dapto was the Illawarra's priority new land release area for the region.

The commissioners said "put bluntly, the horse has bolted" saying this argument was rendered academic when Mr Kelly approved the broad concept plan for Calderwood in 2010.

The commissioners said they did have concerns about flooding, and flooding experts were requested to examine the issue. As a result proposed amendments to conditions of consent were agreed to by Lend Lease.

Mr Ward was disappointed with the decision..

"This is a process that began because the applicant gave thousands of dollars to the Labor Party when Part 3A was in existence," Mr Ward said.

"It was the former Labor government that approved the concept plan, the former Labor government that approved the rezoning and now through the court system the developer has got their way for a project that will impact on flooding, prime agricultural land and the Albion Park community."

In a statement, Lend Lease's NSW Communities general manager Simon Basheer said Lend Lease welcomed the decision by the Land and Environment Court.

"Lend Lease is committed to working in collaboration with both Wollongong and Shellharbour councils to finalise all matters to enable the project to progress as soon as practical," Mr Basheer said.

"The stage one subdivision will enable the delivery of 320 new homes and the development of a future village centre offering a mix of retail and commercial space.

"The Calderwood project will deliver much needed new housing, infrastructure, community services and facilities to the Illawarra region," Mr Basheer said.

Shellharbour Mayor Marianne Saliba said Lend Lease paying increased developer contributions was "a big win" for Shellharbour City.

"Depending upon the outcome of the negotiation process for this first stage, the developer can expect to pay more than double what they were hoping to pay," Cr Saliba said.

"The court process also resulted in the developer substantially upgrading their flood mitigation works to better protect the safety of the community in a major flood event.

"The updated plans will be a much better outcome for our residents who live downstream from this development that will eventually accommodate more than 10,000 people."

The Calderwood Chronicles

Early 2009: Delfin Lend Lease lodges concept plans with the NSW Department of Planning to rezone a 700-hectare site at Calderwood for 4500 new dwellings.

May 2009: Then Planning Minister Kristina Keneally declares the proposal a major project.

November 2009: NSW government declares it a state-significant project.

June 2010: Shellharbour City Council releases a 58-page assessment of the project, declaring it ‘‘economically, environmentally and socially unsustainable’’. Wollongong City Council expresses its opposition to the project.

December 2010: On December 8, Planning Minister Tony Kelly approves the concept plan for the $410 million project including 4800 new homes; a community centre and library, two public primary schools and one public high school, one private school and up to three childcare centres, and announces approval on January 17, 2011.

February 2011: The Mercury reveals Delfin Lend Lease made donations of more than $48,000 to the Labor Party, which were not declared. The assessment of stage one of the project was then handed to the independent Planning and Assessment Commission (PAC) to consider.

March 2011: Shellharbour City Council launches action in the Land and Environment Court to challenge the concept plan approval. 

Wollongong City Council pledges financial support for the action in May as 107 hectares of the 700-hectare site is located within the Wollongong LGA.

March 2012: The Land and Environment Court dismisses the councils’ legal challenge.

April 2012: PAC rejects stage one application for 231 residential lots and 120 medium-density dwellings, saying the development exposed future residents to flooding, leapfrogged established land release plans and was not in the public interest.

June 2012: Delfin Lend Lease lodges an appeal against the PAC decision with the Land and Environment Court.

February 2013: PAC performs what is described as an ‘‘outrageous backflip’’ on the eve of L&E court hearings. PAC now says based on further information available as a result of the court proceedings, Stage 1 may be approved subject to appropriate conditions on flood mitigation works, development control guidelines and contributions towards local infrastructure.

March 2013: Land and Environment Court commissioners Tim Moore and Susan O’Neill conduct hearings at Albion Park and in Sydney.

August 2013: Commissioners grant development consent to Stage 1 of Calderwood.