Developers vs Heritage. The Continental Hotel, Sorrento and the Steller Group.

Nothing illustrates the risky nature of property development more than the recent failure of the Steller Group.

The Steller Group was founded and operated by Simon Pitard and Nicholas Smedley, both second generation property developers and members of two of Melbourne’s wealthiest families. This was a group that played ‘large’. It often paid way ‘overs’ (up to 50% more than the valuation) on targeted properties. Its funding came from dubious ‘hedge funds’ and mezzanine lenders. Our interest is in some of the heritage properties Steller controlled or ended up controlling.

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Greyhound Hotel, St Kilda

 

 

The Greyhound Hotel site in St Kilda and the Continental Hotel in Sorrento are the two most notable. The Group’s failure has defined the schedule and direction of the restoration of the Continental to date.

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London Hotel, Port Melbourne

The issue with the Greyhound Hotel and the London Hotel in Port Melbourne was the narrow parameters used to interpret the Heritage value of both buildings. Renovations on both buildings in the 1920s and ‘30s saw the original buildings originally constructed in the 1850s drastically altered to reflect the Moderne/Art Deco style favoured at the time. In doing so the Heritage value – based on architectural merit – was minimal, according to the Port Phillip Council’s initial heritage report. Nevertheless the planned apartment complex was never built on the Greyhound site which was recently sold to recover debt by the Steller Group’s receivers. The London is still ‘under planning’ – another empty building site with big plans – so long as the ‘off the plan’ apartments can be sold.

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Continental Hotel, Sorrento

But the major ‘faux par’ of the Steller Group was its inability to contribute to the completion of the Continental Hotel, Sorrento’s refurbishment and re-development. The Continental has the highest ranking Heritage listing available. With Steller failing the whole Hotel stood to remain permanently incomplete unless alternative funding could be confirmed.

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Here is its Victorian Heritage Database Statement of Significance.

Statement of Significance:

The Continental Hotel in Sorrento was established in 1875, for the Sorrento Hotel Company under the directorship of comedian, politician, philanthropist and businessman George Coppin (1819-1906). The Continental Hotel is constructed in a simple Victorian Italianate style using locally quarried limestone. The Continental Hotel is a four storey building which includes the mansard roofed tower, return balcony on the upper levels and two storey section to the rear of the building. The building has undergone some major changes, with a Moderne style renovation to the street front of the ground and first floors which includes a roof top deck.

The Continental Hotel is of historical and architectural significance to the State of Victoria.

The Continental Hotel is of historical significance to the State of Victoria for its associations with George Coppin businessman, politician and entrepreneur whose enterprise was largely responsible for the development of Sorrento from the 1870s to the 1890s as a seaside resort. Coppin established a number of business ventures associated with the Continental Hotel such as the steamer service from Melbourne and the Sorrento tramway to encourage tourism to Sorrento.

The Continental Hotel is of architectural significance to the State of Victoria as a relatively intact example of the type of hotel development popular in the later years of the nineteenth century providing accommodation, entertainment and associated hotel services for wealthy city tourists. The Continental Hotel, constructed of local limestone, is important as a landmark building for the seaside town of Sorrento as it is situated on a prominent site at the entry to the town.

Source: vhd.heritage.vic.gov.au

But Restauranteur Julian Gerner, the nominal owner and promoter of the Continental project, has seemingly managed a financial coup and expects now to complete the renovation and refurbishment program commencing early next year with new financial partners.

From The Age Oct 17th (Simon Johanson)

Hotelier in bid to restart work on Sorrento’s Continental Hotel

Redevelopment work on Sorrento’s historic Continental Hotel may resume early next year if hotelier Julian Gerner is successful in a bid to keep ownership of the $100 million project.

The Continental’s future has looked shaky since restoration work on the 144-year-old seaside hotel ground to an abrupt halt in May when joint-developer Steller ran into financial difficulties.

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Restaurateur Julian Gerner (left) with Steller’s Nicholas Smedley in front of the Continental Hotel before the developer collapsed.

A recent attempt to sell the project to another developer LBA Capital for $21 million came unstuck when The Age revealed LBA’s director Demetrios “James” Charisiou had been accused in the Supreme Court of involvement in a sophisticated $400 million fraud against a Korean investment house.

In the Continental’s latest twist, Mr Gerner said on Thursday he intended to retain ownership of heritage-listed project following both the collapse of Steller and the failure of LBA Capital to settle on its purchase.

“I have negotiated an agreement to deliver on the vision to restore, renovate, protect and preserve the 1875 ‘Marvellous Melbourne’ hotel,” Mr Gerner said.

He hopes to restart construction on the four-storey limestone pub after Australia Day next year.

The hotel is now effectively a building site with a large concrete slab and has been sitting empty since Steller’s collapse amid an outpouring of concern from hundreds of frustrated locals seeking answers about its future.

It was built in 1875 and has the highest level of heritage protection due to its historical significance.

Mr Gerner said he had briefed Heritage Victoria and the Mornington Peninsula Shire after forming a new company, The Ocean Amphitheatre Company, to take control of the development.

Ocean Amphitheatre had negotiated an agreement with LBA Capital to be nominated to take over its contract of sale. LBA would take no further role in the Continental’s development, he said.

Mr Gerner said he would be approaching potential investors to fund the final $100 million in construction and acquisition costs.

“It’s a massive relief. I’ve got a couple of key high net worth individuals I will be targeting in coming weeks,” he said.

Title documents show the Continental Hotel site is mortgaged to three different lenders, a factor which could complicate Mr Gerner’s efforts to take control of the redevelopment.

Mr Gerner originally agreed to purchase the Continental Hotel from the Di Pietro family in 2015 for $12 million.

Around the same time, the local council sold him a neighbouring site at 23 Constitution Hill Road for $1.98 million.

He lost control of both sites when Steller unravelled earlier this year.

Source: theage.com.au

The Steller collapse has illustrated the risky nature of depending upon traditional property developers to refresh and renew such heritage properties.

This difficulty and the potential conflict of interests was noted in Britain decades ago. A Heritage Fund (based on funding from the Heritage Lottery) has been Government backed and in operation for decades. You can read about this innovative fund here heritagefund.org.uk/about

With the current state of heritage protection in Victoria, it is time to consider some form of funding for Heritage protection of vulnerable heritage assets.

The wild world of laisse faire property development is most unlikely to satisfactorily protect our heritage adequately , if at all. The Victorian Heritage Council requires further and adequate funding to ensure timely inspections, local Government have a responsibility to provide up to date heritage database information for their areas to the Victorian Heritage Council and ultimately Heritage Victoria and the Minister for Planning Mr Richard Wynne.

It is obvious the system needs to be overhauled to provide failsafe protection for our valuable Heritage treasures. Heritage develops as our nation ages. It’s time to start genuinely valuing it and to do so we must ensure it is adequately funded.

These beautiful edifices and socially important properties need not be museums. With clever planning, architectural know-how and adequate capital, such iconic buildings can be preserved and protected for posterity, as useful ‘living’ entities. It really is time for a Heritage summit that addresses our approach to Heritage buildings, how we decide the merit of a building and then resolve what use is can be put to.

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Corkman Hotel, Carlton

Or we can watch as more Corkman Hotels, more Greyhound and London Hotels, more modernist architecture, more Art Noveau/Modern buildings are simply demolished. Not to mention the early colonial mansions, Victorian Villas and other treasures currently under threat in inner Melbourne.

It’s time for decisive, inclusive action at State Government and Local Government level with key players and stakeholders such as the National Trust, the Heritage Council, Heritage Architects and property owners and developers included in the deliberations. It’s time to define what we now wish to call Heritage and how we can protect it over the next 20-50 years.

Or we can continue on the same path. And frankly that just doesn’t feel like a sensible option.

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Balance Architecture recognises the importance of Historical Architecture. We specialise in the renovation and restoration of Heritage Buildings.

Bayside – The Modernist homes of Black Rock and Beaumaris are under threat. What is the solution?

This will always be the conundrum. Bayside housing with views of Port Phillip Bay to the City and the Mornington Peninsula are prized and sought after. A property currently listed at 407 Beach Rd is priced at $6 million. The current building is rundown and not worthy of preservation. But that means that properties with strong ties to the mid-century modernist movement will also come under immense financial pressure. Bayside City Council has already permitted demolition of a number of such properties over the last few years.

It’s worth taking a look at several such properties. Currently under threat of demolition, 372 Beach Rd. An application has been lodged to knock down the existing building and construct two new buildings. In the building trade this process is known as ‘Dual Occupancy’ and it has been used effectively on less valuable standard housing ‘inland’ from the coastal strip and its more interesting modernist architect designed homes.

Here is a report from the Herald Sun dated 1.11.19 on No. 372…

Beaumaris mid-century homes: New fight to save modernist pad

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372 Beach Rd, Beaumaris could be replaced by two new homes.

372 Beach Rd, Beaumaris could be replaced by two new homes.
Beaumaris architecture enthusiasts are again going in to battle to save a historic Beach Rd mid-century home that has been at ongoing risk of demolition.

An application to build two new dwellings at No. 372 of the iconic Melbourne stretch lodged with Bayside City Council is open to objections until Monday, November 4.

Council will then consider the application including community objections.
The proposed new development would replace the two-storey modernist house designed by Arthur Russell and require “road access, removal of vegetation, (and) construction of front fence exceeding maximum height”, according to the planning application with council.

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Bayside beauty from the street.

Beaumaris Modern successfully fought alongside the local community against previous plans for developing the site by the same owner earlier this year, which the council rejected.

The group’s vice president Annie Price said the new challenge was “about the fifth time” the property with “a lot of architectural merit and historical value” had been at risk.

“Unfortunately, you can’t object to council on that basis. It’s null and void because there’s no heritage protection on the house.” she said.

“It’s very special. It’s been designed in an unusual kite shape to best work with the block and capture the best ocean views.

“Unfortunately, it’s been neglected but it’s just in need of a bit of tender loving care to bring it back.”

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Fiona Austin from Beaumaris Modern with the house.

Ms Price said the council had ditched a proposed study to identify the most significant post-war homes in favour of voluntary submissions by owners of individual properties.

“All these incredible young architects like (Robin) Boyd, Arthur Russell and Peter McIntyre flocked here in the 1960s to experiment with new designs, and created all these wild and wonderful mid-century homes,” she said.

“There was so much optimism that led to these unique, beautiful, individualistic houses.

“We still have some special homes hidden behind the tea trees here, but we’ve lost some really significant ones and The Abrahams House has been at risk so many times; I just can’t see why council can’t do something to save it.”

Bayside City Council director city planning and amenity Dr Hamish Reid said the detailed study on mid-century modern heritage was proposed by the council last year but abandoned following “significant opposition from property owners”.

“The voluntary inclusion process seeks to strike a balance between the protection of significant heritage buildings and opposition from property owners,” he said.

“Council wrote to 6500 property owners in late 2018 inviting them to nominate their properties. 372 Beach Road was not nominated.”

No. 372 was covered by a vegetation overlay that required a permit for the removal of native vegetation and zoned neighbourhood residential — allowing for multi dwellings on a single block with a maximum height limit of two storeys, Mr Reid said.

“The property was previously identified as having potential heritage significance however a detailed heritage study has not been done,” he said.

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It’s one of the last mid-century modern homes left on Beach Rd.

The 1960 property at 372 Beach Rd was on the market for some time this year for $2.4-$2.5 million, having last sold for $2.2 million in 2015, according to CoreLogic.

Beaumaris Modern’s website states “The Abrahams House” is “one of very few original mid-century homes left on Beach Rd”.

The group has listed information on objecting to the planning permit on its Facebook and Instagram pages.

Ms Price said MCM homes were designed for the local climate and landscape and it would be “madness” to pull one down to replace it with two homes squeezed onto a block.

Source: realestate.com.au

These properties designed by the modernist architects of the 1950s provide a difficult dilemma. At this stage, none of these modernist dwellings have heritage listing. NB. we have since been advised by Beaumaris Modern that the following properties do enjoy Heritage Protection – The Grant House, 14 Pasedena Ave Beaumaris, the Godsell House, Balcombe Rd, Beaumaris and the Johnson House, 451 Beach Rd Beaumaris.  It is the responsibility of Bayside Council (in this instance) to maintain a database of heritage listed homes/dwellings.buildings and locations within its boundaries and to ensure the list is then included on the Heritage Council of Victoria’s database. If the Heritage Council is not approached to list a property by Council in the first instance, it will not be inspected or listed. Residents groups can apply for heritage listing and status, but with demolition permits under consideration, it is 11th hour stuff and invariably the demolition proceeds. In simple terms a property with a higher value returns higher rates. The works of Robin Boyd and his contemporaries must be acknowledged and protected where necessary. And it is possible to refresh these properties and achieve excellent financial returns.

Consider this property at 14 Cromer St Beaumaris (owned by a well known hospitality entrepreneur). It demonstrates what can actually be achieved with these homes. If the property were located beachside there is no doubt you could add several more million to its price tag thus ensuring any investment is covered.

From realestate.com.au and the Herald Sun 1.11.19…

Arbory Afloat creative lists Beaumaris mid-century home

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14 Cromer St, Beaumaris is making waves on the market.

Arbory Afloat has rapidly cemented itself as one of Melbourne’s coolest drinking spots, and now the stylish modernist pad of one of the minds behind it has got the city talking too.

The mid-century Beaumaris home, updated to offer the best of contemporary comfort, is starring at inspections as it hits the market for sale.

The architect-designed and renovated house at 14 Cromer Rd has been listed for $2.1-$2.3 million and was among the popular properties with doors ajar for ‘Beaumaris Modern OPEN’.

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Pool or beach? The choice is yours.

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Stone and timber features give the contemporary home original mid-century character.

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Natural light flows through walls of windows throughout the floorplan.

The vendor, who did not wish to be named, is one of the creative forces behind the Yarra River’s floating pontoon bar and commissioned the transformation of their home.

Marshall White Bayside agent Matthew Pillios said the “absolute beauty” attracted 42 groups through its first sales campaign inspection before another 500 went through for the open-home event.

“It’s a very Palm Springs, LA type of home,” he told Property Confidential.

“You’ve got probably 270 degrees of light and vision taking in the gardens; it’s a corner block, single level, architect-designed, high ceilings, loads of windows – very rock star”.

Local modernist architecture aficionados Beaumaris Modern, who run the ticketed ‘Beaumaris Open’ event showcasing some of the Bayside suburb’s celebrated mid-century architecture, posted that the stylish home had “many visitors on Sunday wishing it was their home”.

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Arbory Afloat has quickly become a Melbourne favourite.

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Jadae Bischof and Charley Aitchison enjoy a spritz.

“The owners are now selling after many years renovating and landscaping,” they wrote.

“The original house was designed by architect Kevin Knight in 1953 and the recent renovation designed by architect Matt Green.

“The house has been sensitively renovated and is a fine example of why its often better to renovate and restore a MCM house than build new.”

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Verdant views.

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Tranquil outlooks.

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Soak it in.

The four-bedroom house is marketed as having a Japan-inspired internal garden alongside feature timber panelling, stone fireplace and soaring ceilings “just minutes from the beach”.

It’s scheduled for auction November 16.

CoreLogic records show the property last sold for $880,000 in 2009.

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Lofty ceiling heights give an airy ambience.

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Entertain in style.

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Cosy and comfortable all year.

Source: realestate.com.au

In March this year, the Bayside City Council nominated only four homes for Heritage assessment. Frankly, that was almost unbelievable and left many within the Beaumaris community group _ Beaumaris Modern – somewhat angry and upset. Private home-owners had at that stage initiated a number of heritage submissions themselves. It can be a confusing and complex application process, somewhat daunting and discouraging for any private individuals. According to the Beaumaris Modern group, Council representatives were lacking in information, somewhat uninformed and singularly discouraging of the process.

NB. Beaumaris Modern has contacted us over the weekend and made the following comment “Bayside Council hadn’t nominated any homes in March. It is only just of this week that they are putting forward 9 private homes and 7 council owned properties to the Planning Minister for heritage assessment following their voluntary heritage nomination process closing date. 14 private homes were nominated but 6 (including my own home) were rejected. And there is a very contentious issue with the Beaumaris Art Group Building (designed by Charles Bricknell) that has NOT been put to the planning minister despite Council’s own commissioned heritage consultants recommending it. We are currently fighting Council on this matter.”

Jamie Paterson, the group’s Treasurer, believes there are upwards of 300 homes warranting assessment in Beaumaris and Black Rock.

Balance Architecture is available to assist any homeowner or property owner wishing to avail themselves of Heritage assessment and possible listing. Under the Council’s approach, very few properties have been nominated. With the young Architects like Robin Boyd, Kevin Knight, Arthur Russell and Pete McIntyre creating a unique enclave of homes specifically designed and constructed for Australian conditions, the area is well worthy of preservation.

Council walk a fine line. The ratio of 4 from 300 is not good, but as Dr Hamish Reid of Bayside City Council said when asked recently “Council wrote to 6500 property owners in late 2018 inviting them to nominate their properties. 372 Beach Rd was not nominated.” It’s obvious that some property owners have other intentions and this is where a heritage overlay can ensure the ongoing preservation of unique and irreplaceable architecture. That is a Council responsibility and Dr Hamish Reid is the Bayside Council’s Director of City Planning and Amenity so it is within his province to act.

It is a major dilemma and a perfect example of the head-on clash between Heritage protection and property development. Hopefully with publicity and appropriate process, it’s not too late to save this unique enclave of Australian creativity and ingenuity.

Footnote: We have recently had communications from the Beaumaris Modern Group regarding various reported facts we accepted from both local and mainstream press.

It would appear that Bayside Council is not assisting in preservation of these buildings to the extent it could be.

We will provide updates on this ongoing strategy to protect the Modernist buildings of Black Rock and Beaumaris.

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Balance Architecture recognises the importance of Historical Architecture. We specialise in the renovation and restoration of Heritage Buildings.

Federation Square – Heritage Listed – An Extraordinary Project

In Melbourne nothing stimulates discussion on the relative merit of the architecture of new landmark sites as does the mention of Federation Square or Southern Cross Station. People either love them or hate them.

In the case of Federation Square we are definitely admirers… Let me give you our reasons.

Over the last 200 years the site has had a range of somewhat unpleasant uses. It hosted the City Morgue and the trains that transported the dead to the Kew Cemetery, the original Fish Market, Corporate offices of the most unsightly building that ever graced Melbourne and massive Railway Yards, rolling stock and workshops, an atmosphere of dust, metal noise, smoke exhaust and oil.

With many planners keen to link the Melbourne CBD with its river the Yarra, these plans were always undermined by the conundrum of what to do with the then required extensive and extremely busy Railway yards and facilities.

Perhaps one of the biggest bug-bears was the ridiculous situation where the incredibly ugly Gas and Fuel Towers blocked the view of one of Melbourne’s most iconic and beautiful buildings – St Paul’s Cathedral.

The Gas and Fuel Corporation Towers were somewhat representative of the times in which their construction occurred – 1967. Brown brick, aluminium windows, a pale green and brown monstrosity, commissioned and built over what was originally the Princes Bridge Station and Rail Yards on the South side of Flinders St. What a contradiction it was to the surrounding cityscape.

St Paul’s, Flinders St Station, Young and Jacksons Hotel, the Forum Theatre – all delightful and interesting buildings, constructed to be somewhat timeless – and the Gas and Fuel Building – plonked like a huge hideous misshapen Lego block. When it was finally demolished in 1997 it was to make way for Federation Square and Birrarung Marr, an extensive, beautiful addition to Melbourne’s parkland.

The Railways had occupied the land since 1859, and over the years it became the driving hub for the Melbourne Electrified Railway System.

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Prior to this for thousands of years the site had been the meeting place for indigenous tribes of the Kulin Confederacy. The Wathaurung, the Bunarong and the Woiworung peoples occupied the surrounding lands to the North, South and East with the swamps and salt marshes West to the Marybnong River and beyond being considered communal hunting grounds. Tribal people still camped on the Yarra banks, both sides, stretching from this area down to the MCG and Government House during the early years of European settlement.

Federation Square and its development leading up to the Centenary of Federation in 2001 gave rise to a perfect opportunity to celebrate the ideas of ‘identity’ and ‘place’ in providing a much needed civic and cultural space.

The Victorian Government had commissioned the architecture to Lab Architecture Studio, a firm based in London and Melbourne firm Bates Smart with whom they formed a partnership. Lab Architecture had originally been one of five finalists in the Victorian Government two stage design competition commenced in 1996. The partnership with Bates Smart, a premier Melbourne Architecture firm was required to proceed to the second stage and the consortium was awarded the contract for the design of the new area..

The Fractal Facade is an extraordinary feature. “Three cladding materials: sandstone, zinc (perforated and solid) and glass have been used in a circular pinwheel grid. This modular system uses five single triangles (all of the same size and proportion) to make up a larger triangular panel. Following the same geometrical logic, five panels are joined together to create a large triangular ‘mega panel’ which is then mounted onto the structural frame to form the visible facade.” [from http://www.fedsquare.com]

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For the public the controversy was fanned by ‘shock jock’ radio personalities and tabloid journalists who simply ‘didn’t get it’. The criticism went so far as to see the Glass Shards planned for the North Western corner removed from the plan and the finished result. It was claimed the Government did this to appease critics who believed it would again block the vista of St Paul’s Cathedral however many believe it was an unnecessary political intervention to ameliorate ongoing criticism from more conservative voices in the community.

It is now recognised as an extraordinary contemporary work lauded and praised internationally as changing the overall look of the Melbourne CBD and its entrance. The public have adopted it and its features with enthusiasm and it plays a huge role in Melbourne’s Cultural and Civic Events.

As well, as of 2019, Federation Square enjoys Heritage Protection, having been listed as a Heritage site by the Heritage Council of Victoria. This process was hastened by an ill-advised attempt by both the management of Federation Square and the State Government to demolish part of it and replace it with an Apple Store. With objections from the National Trust, the City of Melbourne, and one of the original architects, the modification was rejected and the square remains intact. Currently the South East corner is off-limits whilst the new Melbourne Underground is constructed.

This in no way encroaches on the visitors experience as most of the works are occurring beneath the ground.

Federation Square is well worth a visit. It provides a gateway to the Melbourne CBD and is an eclectic creation that offers a wide range of activities. From Bars and Cinemas, restaurants and expansive outdoor spaces, it is truly magnificent.

And everyday thousands of Melbournians commute on trains to and from the city beneath the structure. The cinemas, galleries, radio and television studios barely experience a vibration. It is in fact one of the largest expanses of railway decking ever built in Australia taking twelve months to complete.

Next week we revisit Melbourne’s latest Heritage battle – from Sandringham to Black Rock where the wonderful modernist homes of the 1950s and 1960s are under real threat. Already homes built and designed by Robyn Boyd and his contemporaries have succumbed to demolition. The latest challenge is a property located at 372 Beach Rd Beaumaris. The developers have applied to build two new dwellings on the site. Stay tuned.

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Balance Architecture recognises the importance of Historical Architecture. We specialise in the renovation and restoration of Heritage Buildings.