A large five-tower apartment development gained final planning approval to replace a derelict Smorgy's restaurant in suburban Bundoora three days before the distinctive eatery was incinerated in a suspicious overnight blaze last week.
The heavily vandalised Smorgy's restaurant was branded a fire hazard after sitting vacant for several years. Police are still investigating the cause of last week's inferno including a Facebook posting claiming responsibility.
Planning authorities have approved 378 units in five buildings for the 1091 Plenty Road Smorgy's site, reducing the height of the buildings and the number of apartments originally proposed by developer Park Rise Australia.
Fairfax Media has been unable to contact Park Rise Australia.
The mysterious developer has never made public comment about the proposal and its business address is listed at a Richmond development site.
The original controversial 474-unit proposal lodged in May 2011 attracted strong opposition from residents and Darebin Council, including 700-odd objections.
It generated "passionate debate about the intensity of built form that should be allowed on the site", the Victorian Civil and Administrative Tribunal said in its ruling.
"There have been many versions of the development but what we are now approving represents a significant reduction in scale both in built form and in the number of dwellings," VCAT determined.
Opponents were concerned about parking, road access and the building imposing on nearby parkland.
The site has a mix of native and exotic trees that will be cut down to make way for the new buildings but VCAT ordered a tree-root exclusion zone to protect mature trees nearby.
"At least two of the trees near the site pre-date European settlement and must be protected," Darebin's mayor Tim Laurence said.
The approved development has five buildings between four and eight storeys that include two levels of basement car parking for 491 cars and two retail premises up to 1000 square metres in size.
Previously the developers applied for buildings up to 10 storeys tall.
The apartments will face on to the popular Bundoora Park, which contains indigenous River Red Gum woodlands, a children's farm, golf course and heritage village.
On the other side of Plenty Road the former Larundel psychiatric hospital is undergoing significant residential redevelopment.