An multi‑million‑dollar plan to replace the faded Cosmopolitan Hotel with a flashy 7‑storey, 204‑room hotel complex is set to be approved by the Minister for Planning using newly created powers to fast‑track decisions, bypassing council and resident appeals to VCAT.
The ambitious plan for a hotel up to seven storeys, with function rooms, a rooftop bar and basement parking for 151 cars, has won favour with the Minister. A draft Port Scheme Amendment and permit application is now open for consultation until 8 April.
The scale of the redevelopment has shocked neighbours. The plans more than double the number of rooms and height of the current building and will fundamentally change traffic flow in Havelock Street and Albert Street – during both construction and operation.
Meanwhile, the Minister has been attracted by the perceived merits of the expansion, noting that “the Amendment has been recommended for accelerated assessment and determination by the Development Facilitation Program (DFP) on the basis that it will deliver significant short‑ to medium‑term economic outcomes and public benefit, and aligns with government policy and priorities.”
The Ministerial action has bypassed Council and, after this engagement period, rules out any appeal to VCAT. In other words, this engagement period is the last chance for the public to influence the decision.
Development waiting to happen
Faded and reeking of 1980s design and construction, the Cosmopolitan Hotel sits on the block at 2–8 Carlisle Street, between Havelock and Albert Streets. That’s opposite the fabled Galeon Café, adjacent to the rear of the National Theatre and just metres from the intersection of Carlisle and Acland Streets.
The closure of the 200 room Novotel to make way for the St Moritz high‑end residential development has left St Kilda with few accommodation options for visitors looking for more than Airbnb or backpacker style. The current options are The Prince, Tolarno and Accor (on Fitzroy Street).
But the scale and the process of this pending decision have shocked neighbours. Such is the opposition that residents and heritage advocates have rushed to form the St Kilda Hill Heritage Community to coordinate and voice their concerns.
A major concern is that even though the current proposal is overscale, opponents fear this type of planning amendment could remove height limits, sunset clauses and use restrictions – potentially allowing for even larger future developments.
Too big to be good?
In this case, scale does matter. While the plans are in keeping with the current use and would bring economic benefits to the area, opponents argue that the proposed building – at 27 metres – would be taller than significant local landmarks such as Luna Park and the Palais Theatre.
And looking at the Architects perspective views, you can see why. This development will fundamentally change Havelock and Albert Streets forever.
Albert Street, a tiny no-through road, will become a thoroughfare for hotel guests, service vehicles, staff and suppliers, as well as the only access to the National Theatre car park. The 12 neighbours in this street have concerns that the number of vehicles accessing the proposed hotel will change their closeknit neighbourhood.
Opponents are also concerned about the construction period when upwards of 1,000 truck loads of earth must be moved to allow a two levels of underground carparking.
The proposed handling of two heritage cottages on Havelock Street – moving them off‑site, storing them, and reinstating them at a higher elevation – is also a point of contention, with heritage experts describing it as effectively demolishing a heritage building. (See cottages ‘hidden’ in the Havelock render two images above.)
Concerns have also been raised about a critical Melbourne Water barrel drain running through the site, with the proposed basement excavation extending below the drain invert without any apparent Melbourne Water approval for its diversion.
The same developer proposed a 7‑storey building on this exact site in 2010, and VCAT made them reduce it. This new proposal is nearly five metres taller than the one VCAT rejected.
Have your say before 8 April
The St Kilda Hill Heritage Community is lodging a joint 17‑ground community submission on 8 April 2026 via the Engage Victoria portal.
Individual submissions can also be made before 5:00 pm on 8 April.
SKHHC are meeting at the St Kilda RSL on Wednesday 1 April at 6 pm.
There will be a petition available for anyone who wishes to sign it.
People wanting to get involved can contact stkildahillheritage@gmail.com
FYI: Port Phillip CEO distances council from the process
The Port Phillip CEO Chris Carroll responded to TWiSK’s questions about the site with this comment:
“The planning application did not come to Council first. It was lodged directly with the Victorian Government, which is assessing a proposal for a seven‑storey, 204‑room hotel redevelopment of the former Cosmopolitan Hotel site. The Department of Transport and Planning is consulting Council for comment only. We’re not the decision‑maker.”
And such is the role of Council in the eyes of State Government, notes TWiSK. Does this raise concerns about projects like the Carlisle Street supermarkets?
Council may seek an extension on the Engagement period
Ward Councillor Serge Thomann told TWiSK that council was unable to discuss the proposed amendment before deadline because their next meeting was 22 April. He said the deadline should be extended to allow council to consider its response.
He also provided this statement to TWiSK:
“During my first term on Council, in 2009, we unanimously refused a planning application for this same site, and it was significantly smaller than the current proposal. That decision was upheld by VCAT, which imposed conditions consistent with those we had identified.
“The proposal now before us is considerably larger, yet I believe that the fundamental grounds for refusal remain unchanged – particularly in relation to heritage and amenities impacts, which continue to be a serious concern.
“I stand with the residents around the Cosmopolitan, who have expressed strong and legitimate concerns, and I fully support their position.”
