Council’s development windfall reignites calls to secure Macaulay “drainage land” for open space

The City of Melbourne has quietly received millions more in developer contributions than forecast for the past financial year, reigniting community calls to fast-track the purchase of long-promised open space along the Moonee Ponds Creek in Kensington.

According to the council’s 2024–25 Annual Financial Report, audited by the Victorian Auditor-General’s Office and considered at the September 30 council meeting, the City received $10.8 million in development contributions – more than double what had been forecast in its adopted budget just three months earlier.

The 2025-26 budget, adopted on June 30, had forecast $4.8 million in development contributions for the 2024-25 financial year, and only $250,000 for 2025-26. The newly released financial statements, however, reveal that the actual amount transferred to the council’s Development Contributions Plan Reserve in 2024-25 was $10.8 million, bringing the total reserve to $23.7 million – some $6 million more than forecast.

While the variance doesn’t affect the council’s underlying budget surplus, it is significant for the Macaulay urban renewal precinct, where residents have long been pushing for the council to use development contributions to purchase a parcel of “drainage land” along the Moonee Ponds Creek for public open space, the so-called “Macaulay Terrace”.

The Kensington Association (KA), which represents local residents, warned during this year’s budget process that the council’s developer contribution forecasts were incomplete and failed to account for major projects nearing completion in the area. These included Assemble’s 402–444 Macaulay Rd development, with an estimated contribution of around $8 million, and Greystar’s 352–400 Macaulay Rd project, estimated to deliver more than $10 million.

At the time, the KA argued that the council’s low forecasts were “misleading” and risked delaying the acquisition of the drainage land, which has been identified as a critical piece of green infrastructure for flood mitigation and recreation in the fast-growing precinct.

Every resident in Kensington can see these projects nearing completion,” KA interim chair Dr Kate Kennedy said earlier this year. “It’s hard to believe the council can’t.

Back in March 2025, councillors passed a motion directing management to report back “at the earliest opportunity” with options to acquire the drainage land and to provide a clear account of all collected and projected developer contributions from Kensington within Macaulay since 2012. That report has not yet been presented.

The latest financial statements now confirm what community groups had predicted – that major development contributions cash was indeed imminent.

Despite this, the council’s budget and draft 10-year financial plan continue to forecast minimal developer contribution revenue, suggesting the council is still not attempting to accurately predict these inflows. 

During last year's City of Melbourne election campaign, the then and current Lord Mayor, Cr Nicholas Reece, pledged “a game-changing investment in the Moonee Ponds Creek” at “Macaulay Terraces” as part of his “Garden City Initiative”, implementing the council’s endorsed Macaulay Structure Plan 2021.

With the city now holding a significantly larger pool of developer funds than anticipated, pressure is mounting on councillors to follow through on their commitments and secure the Moonee Ponds Creek “drainage land” for public open space.

The City of Melbourne confirmed that developers for the Assemble project in Macaulay delivered their contribution in 2024–25, helping to lift total development contributions "above expectations" to $10.8 million for the financial year.

A council spokesperson said it was continuing to explore all options to create new open space in Macaulay.

“Open space and development contributions help to deliver essential infrastructure projects that support housing growth across our municipality. Upcoming infrastructure projects in the Macaulay precinct include Chelmsford Street Open Space and the North Melbourne Community Hub redevelopment," the spokesperson said.

“The City of Melbourne is currently pursuing a permanent Development Contributions Plan for Macaulay through Planning Scheme Amendment C417: Macaulay Urban Renewal Precinct.”

“Public submissions on the amendment will be considered by Council at the December 2 Future Melbourne Committee (FMC) meeting.”

The council said that the acquisition of the drainage land was subject to amendment C417, as part of the proposed permanent Development Contributions Plan. A decision by the Minister for Planning on the amendment is expected in 2026.

It added that any future decision regarding acquisition of this land was dependent on updated flood modelling from Melbourne Water, which would inform the utility, size, cost and design of future open space. An update regarding the drainage land acquisition will be considered alongside Amendment C417 at the December 2 FMC meeting. •