The State Commission Assessment Panel (SCAP) on Wednesday knocked back the development proposal of a 53-metre tower at 156-172 Franklin Street by property developer Greaton.

The project would have been the second stage of the West Franklin development following the completion of the first stage in 2019, which included a 19-storey and a 17-storey residential tower.

SCAP said while the proposal was not at variance with the development plan and “generally accords” with the Adelaide City Development Plan, it was “inconsistent with the concept plan for development upon land that is bound by the Land Management Agreement”.

A spokesperson for SCAP said while the application had been refused the developer may appeal the decision within two months through the Environment, Resources and Development Court.

The decision followed an earlier ruling by SCAP, which requested Greaton obtain written confirmation from Adelaide City Council to amend a Land Management Agreement (LMA) in place for the precinct and remove references to the overall development height.

Under the LMA, which was introduced in 2005, development on the site is capped at a height limit of within 20 per cent of 25-metres.

Despite the long-standing agreement, Greaton this morning said in a statement it was “surprised at SCAP’s refusal of the proposed building” and that it would “consider its options”.

“During the development of the entire West Franklin Apartments precinct, the first and third stage of the development were approved by SCAP under the same LMA and development plan conditions,” it said.

“Greaton is therefore disappointed that SCAP refused the current proposal based on the LMA, and denied development approvals for a building which is compliant with the Development Plan, has been recognised by SCAP for its design and would add to the vibrancy of the city.

“Greaton is disappointed that the project’s momentum will be interrupted when demand for the first stage has been so strong and at a time when the state and city needs investment in the wake of the COVID pandemic.

“Greaton is determined to realise its vision for the project and will explore all options available to ensure the project proceeds.”

Neighbours of the proposed development told InDaily the current LMA was put in place to give nearby apartment owners confidence about the future of their investment and would erode faith in the planning system if the LMA was easily changed.

Residents of the Gallery and Altitude apartment buildings – which share the site with the proposed Greaton tower – said while they were “pleased that common sense has prevailed” they were prepared to fight any future amendments made to the LMA through the Adelaide City Council.

“Amendments to the law with the LMA is still our concern as residents … and at any time that could be amended or changed. We will do everything we can to stop that happening because it’s not right,” Altitude resident William Stuart said.

“We are still wanting to work with the developer and the council and SCAP to get the right development put in place.”

Altitude presiding officer Ross McPherson said until the developer or the council agreed to shelve the project, the neighbouring residents would “continue the fight” the development.

“The SCAP made the right decision in knocking the application back and I hope that if the application is presented to council that the council members deny any variation to the height,” he said.

The West Franklin tower was originally set to be 25 metres tall when plans were first lodged in 2012, as part of a concept plan by developers Urban Construct and Brookfield Multiplex, which managed the land. But the development approval lapsed before construction commenced.

Chinese property company Zhengtang (now known as Greaton) bought the land and entered into the existing LMA in 2014.

The company planned to build a 53-metre tower on the site – despite the LMA –  on the corner of Franklin and Morphett streets.

The 199-bedroom proposed development is the second stage of an estimated $300 million West Franklin project in Adelaide’s West End. The first stage was completed in 2019 and a third stage comprising of a 17-storey student accommodation tower on Elizabeth St has also been mooted.

The second stage of the development was on the agenda to be discussed by Adelaide City Council last month but was pulled at the last minute, with Greaton project commercial manager Wendy Lieng telling InDaily that the developer needed more time before going to council.

Adelaide City Council this morning confirmed it had not discussed the proposal with Greaton since it was pulled from the agenda but said the door was still open for the developer to apply to have the Land Management Plan altered.

Lieng last month said alternative options were being explored for the use of the proposed open public space beside the old Balfours site on the corner of Morphett and Franklin streets.

Greaton previously proposed partial demolition of the western side of the Balfours building, including the wall, roof and “three bays of brickwork,” with a temporary wall featuring public art to enclose the western façade and create a public space.