Developer Errol Stewart's decision to can plans for two $50 million residential towers, which he said was due to burdensome planning requirements, shows there is a need to change the planning scheme, Launceston Chamber of Commerce executive officer Neil Grose said.
"It is disappointing that the bold development planned by Errol Stewart looks to be at best, on hold, and at worst, cancelled," he said.
"This project, while cutting edge, [was] another important step in recognising the significance of embracing the Tamar Estuary as a place to live nearby and, in turn, to create new levels of vibrancy on the river."
The withdrawal followed the blocking of another, unrelated, development, the Gorge Hotel, which was rejected by the Resource Management and Planning Appeal last month on the basis of height.
Mr Grose said these two events in succession showed there was a need for regulatory reform.
"This, along with the hold-ups with the Gorge Hotel proposal, is yet another example where a simple and straightforward state-wide planning scheme would assist developers and councils to have a clear understanding of the requirements of any particular development at an early stage," he said.
Mr Stewart said on Wednesday he had withdrawn the rezoning application for the Kings Wharf Towers due to a belief the planners would not recommend it be approved, after receiving 11 pages of requirements.
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The largest issue was flood risk management, as the towers would have been located on a flood plain.
City of Launceston mayor Albert van Zetten on Wednesday disagreed with Mr Stewart's claims made in an email to councillors that it was "almost impossible to navigate the planning approval process".
"[That is] simply not the case," he said.
"The City of Launceston has issued more than 650 planning permits this year alone and Mr Stewart has been able to navigate the system on many occasions with previous developments."