A developer backed by Kuwaiti royalty is one step closer to building massive towers next to Station Pier in Port Melbourne after planning authorities wound back restrictive covenants blocking development.
A company linked to Kuwaiti sheikh Mubarak Abdullah Al-Mubarak Al-Sabah is lobbying to build apartments up to five, 10 and 19 storeys tall next to the entrance to Station Pier.
Mr Al-Sabah owns developer Action Group Australia, which owns land at 1-5 Waterfront Place.
His plans, which include a large retail hub and residential towers, have been slammed by Beacon Cove residents and the Port of Melbourne Corporation.
Most buildings near the site are low-rise houses, apart from several seven-storey apartments.
The battle over the controversial development has created a planning flashpoint and significant opposition since it was first proposed nearly six years ago.
Victoria's planning umpire, VCAT, said this week it had been drawn into the "morass" to adjudicate on the covenants because of "neglect, bureaucratic obfuscation, polarised planning attitudes, economic factors and physical depredation" of the existing buildings on the site.
The covenants – a legally binding contract on a land title document – blocked any change to Waterfront Place that hurt the area's "amenity".
They also gave another developer, Mirvac, the right to reject any development not of the same form and size as the site's existing buildings.
But VCAT altered the covenants, saying the development would not affect amenity.
Jill Maddox, a resident who objected to the change in VCAT, said the protection provided by the covenants was "illusory".
"The developer has won and has received permission to vary the covenants to allow buildings that will overshadow the foreshore area for the colder months of the year," Ms Maddox said.
The rundown, single-storey former childcare centre and gymnasium on the Waterfront site has been empty and abandoned since being burnt by fire.
The billionaire sheikh's controversial project has been backed by Port Phillip Council with a planning scheme amendment that limits the development to 10 storeys, a change yet to be signed off by the newly installed Labor Planning Minister.
Before last month's election, Labor said it would back the council's position but stop overshadowing.