Council wins VCAT case over South Melbourne “adult lifestyle” venue

A controversial plan to open a swingers’ club in South Melbourne has been upheld by the state’s planning tribunal, with VCAT ruling in favour of the City of Port Phillip’s decision to grant a permit for the venue.

The decision, handed down on May 5, followed a two-day hearing in April after local residents and business owners sought to overturn the council’s approval for the “Pineapples Club” at 427 City Rd.

The venue, described in planning documents as an “adult lifestyle meeting place” that includes a sex-on-premises component alongside a bar and live entertainment, will be permitted to operate seven nights a week, with up to 200 patrons from 6pm to 2am.

VCAT found that the use of the site – currently a disused Federation-era red brick building in an Industrial 1 Zone – was consistent with the Port Phillip Planning Scheme and would not result in “unreasonable amenity impacts”.

The Tribunal rejected arguments that the venue posed unacceptable risks to safety or neighbourhood character, noting that concerns about anti-social behaviour were not substantiated and that the club's ticketed entry system and venue rules provided appropriate safeguards.

While residents argued the development lacked transparency and proper community consultation, VCAT stated that the advertised application documents clearly described the nature of the use and were supported by adequate acoustic and waste management plans.

Tony Baenziger and Sue Coles, who own the nearby architecture practice Baenziger Coles and led the appeal, had previously described the proposal as “entirely inappropriate” for the area due to its proximity to schools, homes and family businesses.

However, the Tribunal concluded that the site had no direct residential neighbours and that the nearest homes were more than 100 metres away. It also found that noise impacts would be adequately mitigated through permit conditions requiring acoustic upgrades, noise limiters, and independent testing.

The VCAT decision also addressed concerns about the club’s future alignment with changing local planning policy. While the council has adopted a structure plan to rezone parts of the area from industrial to commercial, the Tribunal said this did not justify limiting the club’s operations or lifespan, as the venue would remain permissible under the likely new zoning.

Permit conditions will also require real-time patron monitoring, CCTV, staff supervision at exits, and clear operational guidelines to ensure noise and behaviour are managed responsibly. Acoustic reports must be updated and validated post-opening.

Port Phillip Council Mayor Louise Crawford welcomed the outcome, having previously stated that the council supported the application in line with its planning scheme. While not all councillors agreed with the original decision, she said the tribunal outcome affirmed the planning approval.

“Planning assessments must be based on relevant planning controls and whether the application represents an acceptable outcome under these rules. It’s not about assessing the morality of the use,” Cr Crawford said.

“Our previous council decided the application met these controls and we note that VCAT has confirmed this reasoning was correct, only requiring minor amendments.”

While we acknowledge some residents will not be happy about this outcome there are a number of conditions regulating both the management of the premises and patron behaviour.

VCAT’s ruling paves the way for the Pineapple Club to open later this year, bringing a new and unconventional nightlife venue to South Melbourne’s industrial fringe.

Paralegal Matthew Roberts, who attended both days of the April VCAT hearing, said, “It’s very pleasing to see that the City of Port Phillip has defended its decision to allow an LGBTIQ friendly venue to operate in an industrial part of South Melbourne."

"It was even more pleasing that VCAT said in its final decision supporting the council, that town planning does not involve itself in moral judgements.”

While he said those in the community who challenged the council at VCAT were “disappointed” with the outcome, Mr Baenziger said it understood the decision was final and that there wasn’t much more it could do to oppose the use.

“As such, we can now only hope that the venue’s operator will be the good neighbour they have said they will be and that the patrons who will visit this venue will be discrete and respectful and considerate of the local businesses, property owners and the nearby residents,” Mr Baenziger said.

"You will never convince me that an adult lifestyle venue offering bar services, sexually provocative live entertainment, loud music and purpose-built private rooms to facilitate on premises sexual activities that has the approval and the very real potential to operate from 10am in the morning until 2am the next day, seven days a week, 365 days of the year, with up to 200 patrons, will not have a detrimental effect on the amenity of the surrounding area, and that this type of use will not deter the surrounding property owners from investing in the further development of their properties."

The architect said locals remained concerned with how the area bordered by City Rd, York and Ferrars St he dubbed the “City Rd Wedge” was zoned for industrial use, despite different planning conditions in surrounding precincts.

“It is no longer and has not been an area of industrial uses for 30 years or more, which was finally recognised by the council when it began its efforts to rezone the Montague Precinct in 2010,” he said.

“Following the rezoning of Fishermans Bend – excluding the ‘Wedge’ – to Capital City Zone in October 2012, the council committed to rezoning the ‘Wedge’ to mixed-use, however, it never followed through with this commitment.”

“The ‘Wedge’ is clearly an anomaly in the Victorian Planning Scheme, which has given the applicant for the proposed sex on premises venue a once in a lifetime, golden opportunity to take advantage of this situation.”

Former City of Port Phillip Mayor Marcus Pearl said the council’s decision, now upheld by VCAT, failed to “reflect the expectations and standards of the local community”.

“Residents made their concerns abundantly clear, and this outcome falls well short of what they deserve,” Mr Pearl said.

“Council had the opportunity to stand up for the character of this suburb. It didn’t. And now the burden falls on residents to live with the consequences.”

“This isn’t about being prudish – it’s about the kind of community we choose to build.”