Minister takes $150m Town Hall Square out of Sydney council's hands

The New South Wales government declared City of Sydney’s Town Hall Square proposal a State Significant Development on 9 October 2026, according to a release from the Minister for Planning and Public Spaces. The declaration followed advice from the Independent Planning Commission, published the same day, finding the project holds state and regional planning significance. The move hands assessment of the council’s own civic square, backed by more than $150 million of council funding, to the state. The Urban Developer reported that Planning Minister Paul Scully had directed the council on 17 September not to determine any development application for the site until that advice landed.

Why it matters

Town Hall Square is a council-initiated project, on council-owned land, in the middle of the Sydney CBD, that the state has now pulled out of the council’s own assessment pathway. The ministerial release does not state why the state intervened beyond citing the IPC’s finding of state and regional significance, but The Urban Developer reported Scully’s own stated concern: the project requires demolition of seven buildings opposite Town Hall and commits at least $150 million in ratepayer funds, a scale he said would significantly affect the commercial heart of the CBD.

The state did not wait for a development application to be lodged and then call it in. It first directed the council in September not to determine anything, got the Independent Planning Commission’s advice on significance, and only then declared the project State Significant. That is a direct demonstration of the state’s power under section 4.36 of the Environmental Planning and Assessment Act 1979 to move a civic project out of local hands before the council’s own process runs its course, not after.

The numbers

City of Sydney’s own release put its commitment at “more than $150 million,” approved by councillors on 12 May 2025, with construction slated to start in 2028. The Urban Developer reported the same $150 million figure and 2028 start, and added that the council’s design requires demolishing seven existing buildings on the site and that councillors had weighed a $200 million alternative of upgrading those buildings to market standard instead of demolishing them. The same report put a 2031 completion date on the project, a figure that does not appear in either government release.

The IPC’s advice on significance was published 9 October 2026, the same date as the ministerial declaration. The ministerial release does not disclose when the Commission received the brief, only that the direction to pause council’s determination of any application had already been in place since 17 September, per The Urban Developer.

What’s next

The ministerial release sets out the pathway from here: if City of Sydney now lodges a State Significant development application, the Independent Planning Commission will determine it, the Department will run a whole-of-government assessment, and the public and other stakeholders will get a chance to comment before the Commission decides. Whether the council has lodged, or will lodge, that application is not stated in the release, and nothing on the public record checked for this story confirms it. The declaration clears the pathway for a state-assessed application; it does not yet mean one exists.

For developers and planners elsewhere in New South Wales, the case is a reminder that a council’s own flagship project is not immune from a significance declaration, and that a section 9.1 direction can freeze a local process well before any formal call-in. The next milestone to watch is whether City of Sydney lodges the SSD application (more Sydney planning news), and what conditions, if any, the Department attaches to the whole-of-government assessment once it does.