Meyer Properties has launched an appeal against a decision refusing permission to convert three retail spaces in St George into residential units.

While the proposal sparked objections from members of the St George community, the property owner said in an appeal letter that the project would “breathe added life” into the town with a nearly $1 million investment.

The Development Applications Board found that the company failed to demonstrate that there was no reasonable form of commercial development that could be provided on the ground floor. The appeal letter argued that the properties have no commercial value.

“We propose that a ‘reasonable form of commercial development’ is one where the rent covers the direct and indirect costs and, ideally, provides a return,” the appeal letter stated.

The letter stated that the units, located at Somers Wharf, had lost between $2,899 and $9,999 last year, and that one of the units required an electrical refit, the costs of which “will never be recouped” at commercial rental rates.

“The annual loss incurred by the inner-courtyard units clearly demonstrate the impact of the inner courtyard’s site characteristics — the proposed units have no commercial value,” the letter stated.

“Somers Wharf rental history since 2008 documents that inner-courtyard unit costs increased 62 per cent, while rents fell an unbelievable 25 per cent.

“What was once borderline ‘reasonable’ to maintain as commercial is no longer the case. We submit that the market rents for the proposed inner-courtyard units do not support reasonable commercial development due to lack of visibility and foot traffic, which is an immutable characteristic of the site.”

The appeal letter added that while Meyer had subsidised the rents to minimise turnover costs and support the town, it would not continue to do so.

“If this redevelopment is turned down, we will seek to rent these three courtyard units for commercial rates closer to their costs, to avoid ongoing loss,” the appeal added.

“As such, we fully expect in their current form they will soon join the growing pool of shuttered buildings which dot the town.”

The letter added that Meyer was committed to keeping the waterfront accessible and was open to restrictions that would ensure such.

Meyer Properties sought planning approval to convert 14, 16 and 18 Water Street, all at Somers Wharf West, from retail units to residential units.

A letter from the company included in the planning application said that it had struggled to keep retail tenants in the spaces despite decreased rents.

The proposal garnered a few objections, with members of the public expressing concern about the impact of the changes on the area and the precedent of converting ground-level retail space into housing.

Rachel Perry, owner of The Things We Love, a retail business based in one of the units earmarked for conversion, said foot traffic was good and retail sales were on the upswing.

The Corporation of St George also said it did not support the proposed change of use for the units, stating that the “overwhelming sentiment” of a town hall meeting held to discuss the proposal was against the change.

The plans were formally refused by the DAB last month.