The application was to create the lots in 11 stages with sizes ranging from 2029 m2 to 7112 m2 in area.
With Benalla having a massive undersupply of homes to purchase or rent the proposal would have addressed an important shortfall.
However, councillors outlined too many potential issues with the application to pass the motion.
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Cr Scott Upston told the meeting while he supported the sub-division there could potentially be issues with emergency management and emergency access.
Cr Peter Davis agreed.
“I'm opposed to (the development) from the same point Cr Upston spoke about,” Cr Davis said.
“We’re looking at an area just off the freeway.
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“If you have a fire on the freeway or at the airport you will have 117 lots all trying use one road to get out.”
That one road being Willis Little Dve, an existing access road that already provides access to the area from Kilfeera Rd.
He also cited the proximity to Benalla Airport, mentioning a crash a few years ago at Essendon Airport where a small aircraft had nowhere to go for an emergency landing, and subsequently hit building on the periphery of the airport.
And that was also a concern raised by the Gliding Club of Victoria, which had a representative talk at the meeting.
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“During peak season we might have 50 gliders up per day,” the spokesperson said.
“We are concerned that removing a safety buffer and building so many blocks in close proximity to the airport creates a risk.
“GCV accepts that residential developments are inevitable, in fact we encourage and support what we consider to be appropriate development.”
He went on to explain that the fields the development is cited to be built on provide an excellent location for an emergency landing and urged council to reject the proposal.
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And reject it they did, despite a last-minute plea from Mayor Danny Claridge, who highlighted an unsealed "road" area in the development that he said would provide access for emergency services, and an exit for residents, during an emergency.
“I'd like to support the recommendation,” Cr Claridge said.
“(I) know where the councillors are coming from, but we're all aware that in emergency situations CFA and Police don’t care where they get people out from.”
The motion was rejected four to three with Crs Davis, Upston, Van Wersch and Hearn voting against the development and Crs Claridge, Alexander and Firth voting for it.
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