Australia: Making room for hipster development: Expanding retail development into industrial and rural zones in NSW

Last Updated: 2 August 2018
Article by Breellen Warry, Peter Holt and Georgia Appleby

Most Read Contributor in Australia, September 2018

The NSW retail landscape is undergoing a shift with consumers now seeking closer and more personal relationships with producers and manufacturers, especially those making locally produced goods. This is coupled with an increasing demand for interesting and often 'hipster' food and drink experiences, outside of your standard restaurant or café.

In response to this, the NSW Government has introduced changes to the Standard Instrument (Local Environmental Plans) Order 2006 (Standard Instrument LEP)1 in order to permit land uses which would ordinarily be prohibited in industrial or rural zones.

This article looks at the introduction of two new definitions which have been inserted into the Standard Instrument LEP, namely the definition of 'artisan food and drink industry', and 'garden centre'.

Artisan food and drink industry

NSW is increasingly becoming proliferated by new 'boutique' venues, often hitched onto the side of large industrial spaces, offering craft food and drink experiences. From microbreweries, to cheese makers and charcuterie workshops, local manufacturers are now expanding their services and inviting the public into their factories.

The new definition

To adapt to this changing retail landscape, the Standard Instrument LEP now includes the following definition:

"artisan food and drink industry means a building or place the principal purpose of which is the making or manufacture of boutique, artisan or craft food or drink products only. It must also include at least one of the following:
  1. a retail area for the sale of the products,
  2. a restaurant or café,
  3. facilities for holding tastings, tours or workshops."

'Artisan food and drink industry' is a type of 'light industry'. This means that 'artisan food and drink industry' will be a permissible land use wherever light industry is listed as a form of permissible development under a Standard Instrument Local Environmental Plan.

For example, the Standard Instrument LEP mandates that light industry is permitted with development consent on land zoned IN1 General Industrial and IN2 Light Industrial, meaning that artisan food and drink industry will also become permitted with development consent in those zones. Many rural zones also allow light industry as development permitted with consent.

In essence, this new definition assists manufacturers of craft products by making it easier to lawfully operate retail and other pseudo-tourism uses in industrial and rural zones where previously such development was prohibited.

Notable restrictions

The drafting of the definition limits the scope of this new land use, prescribing various restrictions. Most obviously, the definition restricts the type of ancillary activities that can be carried out to retail sales, a restaurant or cafe, and facilities for hosting tastings, tours and workshops.

There is also a restriction on the gross floor area that may be occupied for the purpose of retail sales (not including any café or restaurant area). For example, it must not exceed a maximum of 67%2 of the gross floor area of the industry or not more than 4003 square metres, whichever is the lesser. A State environmental planning policy made at the same time as the amendments to the Standard Instrument LEP prescribe varying maximum floor areas for each local government area that has adopted the Standard Instrument.4

Garden Centre

Garden centres have evolved into places which provide consumers with more than just landscaping and gardening supplies. Increasingly, consumers are looking to garden centres for complementary services, including outdoor furnishings, pets and pet supplies, cafes and fresh produce.

Garden centres are a type of retail premises. The Standard Instrument LEP mandates garden centres as permitted with consent in the following zones: B5 Business Development, B6 Enterprise Corridors, B7 Business Park, 1N General Industrial and IN2 Light Industrial.

New definition

In order to accommodate this change, the Standard Instrument LEP will now include the following definition:5

"garden centre means a building or place the principal purpose of which is the retail sale of plants and landscaping and gardening supplies and equipment. It may include a restaurant or café and the sale of any of the following:
  1. utdoor furniture and furnishings, barbeques, shading and awnings, pools, spas and associated supplies, and items associated with the construction and maintenance of outdoor areas,
  2. pets and pet supplies,
  3. fresh produce."

This new definition clarifies, and to some extent expands upon, the principal and complementary uses that may be carried out in a garden centre. Notably, it also removes the term 'ancillary' which was a key term under the old definition and instead, lists the uses that may be associated with a garden centre. In doing so, the new definition hopes to minimise any potential issues with ambiguity.

This revised definition does not amend the land use tables in a local environmental plan and, therefore, it does not impact upon where garden centres are permissible or prohibited. However, the listed associated uses may be broad enough to now capture larger scale retail developments that would otherwise be prohibited in a zone. For example, an LEP may state that hardware and building supplies stores are prohibited in the B1 Neighbourhood Centre zone. However, because a garden centre is permitted with consent in that zone, a hardware store may seek development approval under the guise of operating as a 'garden centre'.

Impact of amendments

The introduction of these two new definitions into the Standard Instrument LEP is illustrative of a deliberate attempt to update and expand upon retail land uses in zones which otherwise expressly prohibit such uses.

On the one hand, this demonstrates how minor amendments to planning instruments can enable the NSW planning system to adapt to new development demands and consumer trends.

However, conversely, it also presents an opportunity for some zoning controls to be interpreted in a manner that may allow otherwise prohibited development.

It will be interesting to see the impact of these amendments on the value of land in industrial and rural zones, as the ability to incorporate retail uses may increase the economic potential of certain sites.

Footnotes

1 Standard Instrument (Local Environmental Plans) Amendment (Artisan Food and Drink Industries) Order 2018.
2 Depending on the local government area, this can range from 1% (Lane Cove Local Environmental Plan 2009) to 67% (Standard Instrument and others such as Balranald Local Environmental Plan 2010).
3 For example, under the Cessnock Local Environmental Plan 2011 it is 10% and 100 square metres.
4 State Environmental Planning Policy Amendment (Artisan Food and Drink Industries) 2018.
5Standard Instrument (Local Environmental Plans) Amendment (Garden Centres) Order 2018.

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.

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