Wagga councillors have knocked back a planning proposal to potentially build houses near Kapooka army base after a dispute between local developers and the Department of Defence.
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Councillors voted unanimously at Monday night's council meeting to refuse a planning proposal that would have rezoned seven lots near the Olympic Highway for potential residential use.
Wagga City Council backed Defence and said in a report it advised developers "on numerous occasions" their proposal would not be supported because of its proximity to the army base.
The council report outlined other concerns about the proposal including the possibility of contaminated soil and the difficulty in building sewerage infrastructure for any residential development.
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Council director of regional activation Michael Keys said the proponents had been told from "as early as late 2017" that further encroachment on the army base was not supported.
Wagga planning consultant Ian Graham, a former chief town planner, spoke on Monday night in support of developer Geoff Kidd, who Mr Graham said felt "aggrieved" by parts of the application process.
"It is understood to be of concern to the council that if Kapooka disappeared the city would be completely disadvantaged economically ... however my view is that is not the case," Mr Graham said.
He said he would go even further than Mr Kidd and proposed building higher-density houses at the site because of its proximity to central Wagga.
"I think at this stage to deny a closer look at this would be in error for the city to progress," he said.
"You talk about building and resilience, I think you've got to look at your options and this one is certainly one that has always loomed large since 1968."
The Department of Defence has opposed the proposal since 2018 when it advised developers their project would "set a precedence for further rezoning of areas surrounding [Kapooka]".
Wagga City Council documents reveal Defence warned developers that any neighbouring residents would be subject to light and noise pollution, as well as security issues associated with training activities at the base.
Later in 2018, council advised the developers the proposal was inconsistent with local and regional strategic planning documents and said there was "very little support" for residential development on the land in question.
The warnings did not deter developers, with urban planner Gary Salvestro lodging a proposal on behalf of Mr Kidd's Brash Corporation in December 2020.
The applicants will now have to apply to council to have part of their $44,000 application fee refunded.