Better streets and spaces

An update on Sugarcube Apartments and Honeycomb Terraces

The latest information on the Erskineville development.

We approved the construction of Sugarcube Apartments and Honeycomb Terraces in the old Ashmore industrial precinct in Erskineville in September 2015. 

This approval included strict conditions, the developer, Golden Rain, had to follow before starting construction.

These conditions required the developer to remediate the site due to contaminated groundwater and the presence of heavy metals, hydrocarbons and asbestos. 

The remediation had to be carried out in accordance with a remediation action plan approved by an independent site auditor. 

We contend that the developer began construction without meeting all these conditions. 

The developer also proposed a number of environmental management plans that would make the City of Sydney and future residents responsible for ongoing monitoring of the site. 

How the City of Sydney responded

We met with Golden Rain on numerous occasions. This included a review of environmental data and discussions with the NSW Environment Protection Authority (EPA)-accredited site auditor. 

On 20 August 2019, we wrote to Golden Rain and suggested: 

  • environmental insurance be investigated to cover any future rehabilitation costs 
  • revised environmental management plans for the terraces, apartments and public roads
  • modification of the existing development consent to incorporate the 3 revised environmental management plans
  • Golden Rain provide a clear strategy for maintenance of the vapour barrier system installed under the terraces to capture and divert vapours from the groundwater.


Further site testing

The EPA issued a letter to Golden Rain on 3 September 2019 advising of the potential migration of contaminated groundwater to neighbouring properties. 

The EPA told the developer it needed further testing referred to as “flux-based groundwater assessments” to address this issue. 

Golden Rain’s consultants prepared a report on 22 October 2019, which the site auditor reviewed on 26 October 2019. 

The site auditor required numerous matters to be addressed in the report and for it to be revised and resubmitted by Golden Rain. 

On 7 November 2019, Golden Rain advised us it was finalising the revised flux testing report for resubmission to the site auditor and EPA. 

Golden Rain also advised it carried out further work on the remediation action plan, the 3 environmental management plans and a strategy for the operation of the terrace vapour barrier system. 

EPA response – December 2019

The EPA advised that neighbouring properties and future occupiers of the site weren't at risk, provided the contamination is managed on an ongoing basis by long-term environmental management plans. 

The EPA also provided a report setting out the requirements for consideration as part of the environmental management plans to be adopted. On this basis, the EPA advised that it considers it unnecessary to regulate the site under the Contaminated Lands Management Act 1997 (“CLM Act”). 

Golden Rain response – 20 December 2019

Golden Rain updated the City on 20 December 2019 and indicated a path forward following the response from the EPA. Golden Rain advised that it intended to: 

  • lodge a modification application in January 2020 to amend the terms of the development consent and voluntary planning agreement to permit the staged occupation of the site, starting with Sugarcube Apartments and followed by Honeycomb Terraces at a later time 
  • provide an addendum to the remediation action plan for the site 
  • provide an updated risk assessment for the Honeycomb Terraces 
  • provide a strategy for a community title of the Honeycomb Terraces


Golden Rain also provided us with an updated environmental management plan for the Sugarcube Apartments building. 

City of Sydney response – 2 March 2020

We wrote to Golden Rain offering in principle support of their proposed modification application for the staged occupation of the site (Sugarcube apartments stage 1 and Honeycomb Terraces stage 2), subject to proper assessment, notification and provided they meet a series of conditions to protect future residents and visitors to the site. 

Modification application lodged – 21 April 2020

Golden Rain lodged an application to modify the development addressed at 1 Metters Street, Erskineville and referenced D/2015/154/E. 

The modification sought to stage occupation of the development and to amend the timing of land dedication. 

The amendment also included consideration of environmental recommendations for the site and the use of temporary easements to provide access to the apartments (Stage 1 of the development). 

Draft deed of variation – 24 July 2020

The City and Golden Rain prepared a draft deed of variation for the planning agreement for the whole development. 

This created an opportunity for the apartments to be safely occupied, and allowed the developer time to address contamination issues on the remainder of the land. 

The planning agreement provided for the dedication of land for new public roads and pedestrian link, along with a financial contribution towards the future completion of the pedestrian link. 

The draft deed of variation included: 

  • the staged occupation of the site, with stage 1 being the apartments and stage 2 the terraces
  • an easement and covenant allowing for public access over the future roads and pedestrian link prior to occupation of stage 1 
  • the dedication and transfer of the roads and pedestrian link prior to occupation of stage 2 
  • an environmental insurance policy on terms acceptable to the City for the roads and pedestrian link prior to occupation of stage 2 
  • incorporating the changes made in a previous deed of variation by consolidating and restating the planning agreement.


Changes to the planning agreement – 24 August 2020

The draft deed of variation was on public exhibition until 22 August 2020. The City and Golden Rain then worked through the process of executing and registering the deed. The variations applied once the deed was signed by both parties. 

Modification application approved – 2 September 2020

The application to modify the development consent (D/2015/154/E ) was approved on 1 September 2020. This allowed for residents to occupy the site in stages, with stage 1 for the apartments and stage 2 for the terraces. Stage 1 also included an easement allowing for public access over the future roads and pedestrian link before residents occupy the apartments. The roads and pedestrian link will later be dedicated to Council before residents occupy the terraces. 

The modification included adopting environmental management plans for the apartments and the road areas. Residents began to occupy the apartments in December 2020. From this point in time onwards the Owners Corporation were responsible for compliance with the site’s environmental management plan. 

Further testing and remediation work

In December 2021, we were advised by the site auditor that, following additional remedial work, an active environmental management plan would not be necessary for Coppersmith Lane, Zenith Street and the pedestrian link. This work would ultimately make it easier for Council to take over the management of these roads.  

This additional remediation work was completed on 23 September 2022. The roads and footway were restored by Golden Rain and an environmental consultant prepared a report to confirm the remediation works met the required standards. 

The City and Golden Rain also agreed on appropriate insurance which met the requirements of the planning agreement. 

Modification application partly approved – May 2023

In May 2023, the City of Sydney partly approved a modification application for an environmental management plan in relation to the contamination under Metters Street. There remains residual contamination underneath the dedicated public domain area on Metters Street.  

The plan outlines the management of the concrete pavements and containment cell which houses asbestos impacted material under the site. Containment cells are designed to contain pollutants, preventing them from impacting the immediate environment.  After review by our public domain and health and building units, the plan was considered acceptable.  

Landowners will need to comply with the ongoing obligations of the management plan. The May 2023 approval included a specific requirement that a covenant be registered on the title of the land  reflecting this obligation.  

In August 2023, the site auditor issued a Section A2 site audit statement confirming  the remaining contamination in the Metters Street public domain meets Environmental Protection Agency standards for public roads and walkways, providing the environmental management plan is complied with.  

Development application under assessment March 2024

A development application is under assessment for the strata subdivision of the Honeycomb Terraces to create 18 allotments and common property. The application also seeks approval of an environmental management plan which sets out how the residual contamination at the Honeycomb Terraces will be managed.  

A concrete slab and vapour barrier system  has been installed beneath the habitable areas of the Honeycomb Terraces to protect people on site from exposure to the polluted groundwater and soil vapour. The environmental management plan also outlines measures to minimise disturbances to the system, maintain integrity of the concrete slab and enable the terraces to be occupied.  

If the application is approved, the owners corporation will be responsible for ensuring the integrity and function of the internal and external groundfloor concrete slabs that protect the system. This responsibility includes ensuring the slabs are maintained, with any repair works to be completed in accordance with the environmental management plan. Yearly inspections of the groundfloor surfaces and vapour barrier system must be carried out and documented  by the owners corporation.  

The development application is accompanied by a letter of interim advice prepared by a site auditor which confirms the environmental management plan meets Environmental Protection Agency guidance and provides an appropriate strategy for the long-term management of the vapour barrier system under each terrace.  

If approved, as per the May 2023 decision, a covenant on title binding owners (and future owners) will need to be registered which reflects owners responsibility for the ongoing maintenance and any future rehabilitation works related to the contaminated materials.    

What the purchasers of these properties can do

We understand this has been an incredibly frustrating experience for the purchasers of these units and terraces. 

Purchasers are encouraged to seek their own legal advice if they're concerned about the ongoing contamination issue. 

We’re aiming for a solution that doesn’t negatively impact future residents and the public for many years to come. 

We’ll continue to work with the developer until we’re satisfied it has taken all necessary steps to ensure the site is suitable for purchasers to move in...

Published 20 August 2019, updated 21 March 2024

More on Erskineville