The Mayfield BP service station and connected businesses are set to be demolished to make way for a six-storey apartment building in plans approved by Newcastle council.
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The $26 million mixed-use development on the corner of Maitland Road and Baker Street was given the green light by councillors on Tuesday.
The complex will house 58 apartments, five ground floor commercial spaces and 70 car spaces across basement and ground levels.
The building will reach 21.3 metres to the lift overrun - higher than the 20 metre height limit for the site, while the floor space ratio exceeds the development standard by 4.5 per cent.
But the plans had been recommended for approval with conditions including measures to prevent damage to adjoining properties from excavation works, which had been requested in the one objection council received to the proposal.
Deputy lord mayor Declan Clausen also said the report identified that the lift overrun would not cause any adverse shadowing on any neighbouring development or on the park.
Greens councillor Charlotte McCabe said she initially believed a proposed internal courtyard in the complex was "excellent design" as it would block noise from Maitland Road, but was perturbed to find out from the Urban Review Design Panel, which reviewed the application, that the design didn't meet the requirements for open communal space.
"Only by 4 per cent," she said. "Which usually I would have found [okay] as long as all attempts had been made to find the best outcomes for the site.
"But it was the fact that they [the panel) used the comment that this was acceptable, because the people in these dwellings would be able to use Webb Park as their communal open space, which really just set all of my alarm bells off.
"I really have a strong reaction about private design not meeting their requirements, over-achieving in their floor space ratio and underachieving in their communal space and then saying that that's acceptable, because there's a public park there that the private dwellers will be able to utilise."
However she ultimately voted to approve the proposal alongside the rest of the elected council.
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