Sydney Town Hall Square Project Grinds to Halt Ahead of Planning Commission Review

NSW Planning Minister Paul Scully has put the brakes on the City of Sydney's $150 million Town Hall Square project, forcing it to be examined by the Independent Planning Commission. The move has sparked criticism from the City of Sydney, with Lord Mayor Clover Moore expressing shock and disappointment.

The project, which involves creating a 4,500-square-metre civic plaza opposite Town Hall, has been met with opposition from various groups, including the retail workers union. The union argues that the demolition of seven buildings, including a Woolworths supermarket, retail stores, and a pub, will put 1,000 jobs at risk.

Project Background

The City of Sydney envisages the plaza as a gathering point for community events, music events, and markets. The council had resolved to move ahead with the design and construction of the square, with a unanimous decision to fast-track demolition work of the buildings on land the city has obtained since the 1980s.

Plans for the square have been on display for community feedback since early August, with artist impressions showing the open square with a water feature and a curved grove of native trees.

Reaction to the Government's Decision

Mr Scully issued a direction to the council on Thursday, preventing it from determining development applications or demolition orders in relation to the project. He said he believed it could be considered a "state significant development", given the cost of the project and the demolition of "cultural and commercially" significant buildings.

"I feel it could meet the definition of state or regional planning significance," Mr Scully said. "I want to get that advice from the Independent Planning Commission. That's the requirement of me under the act [Environmental Planning & Assessment Act]."

City of Sydney Lord Mayor Clover Moore said she was "shocked and disappointed" by the government's decision that could delay or block the project.

"In 2025, we briefed the planning minister on the project in detail and no concerns were raised," Cr Moore said. "The NSW government also approved the City's acquisition of the final property needed to deliver the square."

City of Sydney Deputy Mayor Jess Miller also criticised the decision as "disappointing", arguing the area needed more open space.

"We're going to have a huge increase of population in the city of Sydney. We're going to need new public squares," she said. "It's been done very thoughtfully. We've saved up our pennies."

Miller added that the decision was "really awful" and that the council had "done all the right things".

Union Backs Government Move

The proposal has drawn opposition from the retail workers union, which argues the demolition of seven buildings will put 1,000 jobs at risk. Shop, Distributive and Allied Employees Association NSW state secretary Bernie Smith said 300 of those jobs were in the Woolworths and Big W on the corner building.

"There's not a suitable floor space currently available to relocate that shop, as far as we are aware, that would actually preserve all of those jobs," Mr Smith said. "Our members' jobs are potentially at risk depending on the outcome."

Business Sydney head Paul Nicolaou, who opposes the plan, said the supermarket was the only full-service kind in the CBD and was "vital to the future of a city where more people are choosing to live".

"Thoughts of a Town Hall Square might have been a nice-to-have when the concept was first mooted more than 30 years ago," Mr Nicolaou said. "But the economic realities of 2026 are very different."