Council approves amended Russell St function centre, despite 36 objections

The City of Melbourne has backed an amended permit for the Space Hotel on Russell St, approving changes to a long-running proposal for a rooftop function centre after finding the revised scheme would deliver better heritage and amenity outcomes.

Councillors considered the application for 380-388 Russell St at the Future Melbourne Committee on May 19, ultimately supporting a notice of decision to grant an amended permit. The proposal relates to the former Independent Order of Odd Fellows (IOOF) offices, now known to most Melburnians as the Space Hotel, a nine-storey building on the corner of Russell and MacKenzie streets.

The application sought to amend an existing permit rather than create an entirely new use. It updates the permit description and conditions, introduces an extra hotel room on Level 7, and revises the design and layout of a Level 8 function centre and outdoor rooftop terrace. The lower levels of the building, including the ground-floor restaurant and bar and the hotel use itself, are not being changed.

Speaking on behalf of the applicant, Planning and Property Partners consultant Luke Mooney told councillors that the proposal was largely a reactivation of a 2019 approval that was never acted on because of the disruption caused by COVID and the years that followed.

He said the revised design had been improved through a lengthy process of consultation with officers and the council’s heritage adviser.

This application is really quite confined in terms of what it does to the building, he said, adding that the revised Level 8 addition and Level 7 changes had been executed “in a better form” than the original approval.

The amended permit attracted 36 objections, with neighbours mainly raising concerns about patron behaviour, traffic and parking, taxi and rideshare activity, waste and litter, and especially noise and amenity impacts from late-night operation of the venue.

Deputy Lord Mayor Roshena Campbell acknowledged those concerns directly. She said the key questions for the council were noise, amenity and heritage, but stressed that councillors could only consider the changes now proposed, not relitigate the already-approved use of the site as a function centre.

Cr Campbell said the amended proposal represented a clear improvement, particularly because it reduced the permitted hours of the rooftop terrace from midnight to 11pm, introduced updated acoustic modelling that responds to the latest EPA noise protocol, and included more specific and enforceable permit conditions.

“There has been a reduction in permitted hours for the rooftop terrace,” she said, noting that the maximum patron capacity of 200 remained unchanged.

Cr Owen Guest, who said noise was a sensitive issue in his East Melbourne neighbourhood, pressed the applicant for confidence that residents would not be unduly affected. In response, Mooney said outdoor use would end at 11pm, with activity moving inside after that, and pointed repeatedly to the importance of the venue management plan, acoustic report, noise limiters and the council’s ability to require further monitoring if problems arose.

The building’s heritage significance was also a major consideration. The site is covered by a heritage overlay and recognised as a significant heritage place. Councillors were told Heritage Victoria, which was a referral authority due to the nearby Royal Exhibition Building environs, had not objected to the proposal.

Cr Campbell said the revised design was “more sympathetic to the original permit when it comes to the heritage context” and backed management’s position that the amended plans offered an improved planning outcome overall.

The motion passed with 10 councillors in favour and Residents 3000 president Cr Rafael Camillo abstaining. •