The state government has knocked back an $85 million high-end five-star eco-resort for Cape Bridgewater, but the door has been left open for a smaller development to be considered.
The news was a welcome relief for those who were opposed to the project with a Save Cape Bridgewater spokeswoman saying she was ecstatic about the decision.
The proposed resort would include an 88-bedroom hotel spread over four lodges as well as 13 two-bedroom villas and five one-bedroom villas.
The hotel would have been connected by a tunnel to a restaurant with sweeping views across the bay and would also include a spa, gallery and underground car park.
A government spokesperson said it was decided the proposal was inappropriate for the site following advice from an independent advisory committee.
However, the the committee did not rule out tourist accommodation on the land. "It concluded a well-designed reduced scale development is appropriate for this sensitive coastal site," the spokesperson said.
Planning minister Richard Wynne has invited those behind the project to meet with Department of Environment, Land, Water and Planning senior officers to discuss the committee's report and a potential pathway for a suitably redesigned proposal that does not dominate the landscape, in particular the hotel complex of buildings.
"A decision on whether to submit a redesigned proposal is a matter for the proponent," the spokesperson said.
Australian Tourism Trust is behind the project on Blowhole Road, and is one of up to seven developments worth more than $1 billion it has in the pipeline for the rest of the state including two on the Great Ocean Road.
Association group member Helen Oakley said the development was inappropriate for the area and welcomed the government's decision. "We're all pretty ecstatic about that," she said.
Group spokesperson Patrick O'Brien said the development was found to essentially be too big, too dominant and not appropriate for the location.
"We're very relieved. We are very happy. It's been a very stressful 19 months since this application was made to Glenelg Shire Council two days before Christmas in 2019," he said.
Mr O'Brien said the association was not opposed to development, but anything on the site needed to be sympathetic to the landscape and should not detract from natural landscape.
An advisory committee was appointed to assess the proposal during a 14-day hearing which was held in May and June.
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The advisory committee did find that the proposed residential hotel would meet a need for high-quality tourist accommodation in the south-west and would have a significant, but undetermined, economic and employment benefits.
However, it also found the design, siting, scale and visual impact of the development - particularly the hotel complex of buildings - were inconsistent with state and local planning policy.
"The committee concluded that the proposed development would present as a dominant and unacceptable built form in a landscape of state significance and should not be supported," the letter says.
In July last year, Glenelg Shire councillors voted 6-1 to give "in-principle support" to the project but referred it to the government to make the final decision.
The project had attracted support from the Portland tourist association and a petition in support of the project attracted 900 signatures.
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