James Packer's Crown Resorts has told planning authorities it cannot shift the 275 metre-tall casino and apartment tower back from the waterfront site, because under gaming legislation it has been guaranteed the site.
This is despite the City of Sydney and numerous leading architects urging the Planning Assessment Commission, the final arbiter on the massive project, to relocate the tower toward Hickson Road, in order to create a contiguous waterfront parkland.
At its public hearings last week the PAC heard numerous submissions from the public, the Australian Institute of Architects and two former government architects.
The submitters said it was public land, and that the public interest was being compromised by the casino location which leaves just a 20 metre public thoroughfare around its base.
But Crown has told the PAC it is not open to the authority to change the site, because it was legislated for in the Casino Control Act, which was amended in 2013 to establish the second restricted gaming licence which was awarded to Crown without tender.
It includes a map of the site, as casino licences must be defined geographically. Crown argues that the site was approved by parliament and so cannot be altered.
If Crown is right, then the PAC has very narrow scope to alter the casino plans. It could reduce its height and bulk, but it cannot move it.
It would also mean that the current PAC hearings on the latest changes to the masterplan for South Barangaroo, known as Modification 8, are very narrow.
A spokesman for the PAC confirmed that it is aware of the argument about the Casino Control Act.
But City of Sydney is arguing that the planning risk has and still remains with Crown resorts and this was made clear when the government gave its second stage approval to Mr Packer's bid for the project.
The dispute over the intersection of the planning regime and the casino regime could potentially flare into a major legal spat.
The Crown argument is understood to have some powerful backers, including the Barangaroo Delivery Authority, a government body responsible for developing Central Barangaroo and overseeing development at the entire site.
Lend Lease is also a strong backer of the waterfront site for the casino.
Under Modification 8, the proposed hotel will be moved onto land from its current approved site on a pier in Darling Harbour. Former premier Barry O'Farrell made it clear he did not want the hotel over the water.
The Crown resort, which was granted the right to develop the hotel without tender because it was an unsolicited proposal, is now proposed to be located 30 meters from the water's edge in South Barangaroo, on a six-storey podium which will house cafes, restaurants, and gaming floors.
