The Adelaide City Council last night passed a motion expressing “profound concern” at the inclusion of residential apartments in the State Government’s vision for the old Royal Adelaide Hospital site on North Terrace.

The proposed development, revealed by the government last week, would feature more than 1000 apartments, a massive 5-star hotel, a research centre, an extra two hectares of space for the Adelaide Botanic Garden, with the possible addition of a contemporary art gallery.

But Deputy Lord Mayor Megan Hender told last night’s meeting a central purpose of Colonel Light’s design of Adelaide, with parklands surrounding the CBD and North Adelaide, was to limit supply of land for residential development.

“They have always served as an economic barrier … to limit supply,” she said.

“We can’t say yes to putting residents in there.”

The development would lead to “a further flooding of the apartment market,” North Ward councillor Phil Martin said.

Area councillor Sandy Wilkinson claimed apartments on the old RAH site would “completely monster the demand for development in the city”.

“We’re not going to be selling any more apartments in the city.”

Wilkinson accused the State Government of “flogging off bits of our parklands to (improve) the balance sheet” and added that the Property Council – which represents the South Australian property development industry – should have strongly objected to the development in order to protect the interests of developers with projects in the CBD.

“The Property Council, of all people, should be up in arms,” he said.

But Property Council Executive Director Daniel Gannon told InDaily this morning: “What we’re talking about here is a handful of councillors putting forward reckless motions that will harm investment potential and confidence.”

“If we want to be known as a smart city of the future and one that is not stuck in the 19th century, then we have to make smart decisions,” he said.

“Constant attacks on progress and confidence will handcuff Adelaide to the past, rather than the future.”

He argued that the fast-growing population of Adelaide’s CBD would more-than account for an increasing supply of city apartments.

“What we don’t have is a supply glut,” he said, adding that on current population projections about 1100 new residents would move to the CBD each year.

North Ward councillor Susan Clearihan told last night’s meeting the development would set a “dangerous precedent” for development in the Adelaide parklands.

“Not only does this blight our reputation and our brand, but it sets a very dangerous precedent,” she said.

But Gannon said the development industry had no intention of building residential apartment buildings in the parklands beyond the old Royal Adelaide site because the parklands were “a major drawcard” for future residents.

He said the old RAH site had not been ‘parklands’ for more than 150 years – since the hospital was built – and that it was an ideal location for residential development.

Premier Jay Weatherill said in a statement last week that that the development “recognises the importance of maintaining day and night activity on the site, replacing the people lost by the relocation of the RAH (to the new RAH at the western end of North Terrace) and helping to sustain and grow economic activity in the east end”.

“This proposal could play host to a multitude of small to medium enterprises, co-located with the best and brightest minds from across Adelaide, working together for the future of South Australia.”

Government promotional material for the development says it is expected to generate “more than $1 billion in private investment, as well as 1000 jobs per annum during construction and 2900 jobs on site when finished”.

“It represents a perfect opportunity to connect with and leverage off other investments, integrate destinations and maximise social and economic benefits within the CBD.”

Lord Mayor Martin Haese told councillors last night: “I share your profound concern.”

“(However) there are some very good aspects of what’s (planned) on the site.

“The reality is – what’s the alternative? I want to see something happen on this site.”

He argued that it would be a “far worse” outcome if nothing were to occur on the site after patients and staff move to the new Royal Adelaide Hospital.

In a statement to InDaily this morning, he added that “the site is not parklands in its truest form and that it’s currently filled with largely unattractive buildings”.

“We need to appreciate that the inclusion of residential development would be key to ensuring the developer receives a return on their investment in constructing the remainder of the site for community use,” he said.

“The alternative is that we are left with a blighted, inactivated site, which would be a massive blow to the economy of the East End and beyond, or the project is solely funded by taxpayers.”

According to Haese, “the vast majority of the announced development aligns with council’s aspirations for the site, such as the retention of heritage buildings, higher education, innovation and arts/cultural uses, and the return of one third of the site to the Botanic Gardens, which is incredibly significant”.

Area Councillor Natasha Malani, who voted against the motion to express “profound concern”, said that the residential development proposed “has the potential to be very high tech – and lead the way on CBD residential living”.

“Mixed use on the site will be critical to the viability of the development,” she said.

The State Government will work with chosen developer Commercial & General to develop detailed masterplans for Development Assessment Commission approval.

The new Royal Adelaide Hospital is due to open next year.