A Victorian Civil and Administrative Tribunal hearing about the proposed subdivision of Diocese of Sandhurst-owned land in Golden Square began in Bendigo Magistrates Court on Tuesday.
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Last year Bendigo Council approved a proposed 84-lot residential development and establishment of a nature reserve at 134-166 Aspinall Street.
Development on the site is opposed by the Aspinall Action Group, who say the site contains native vegetation of significance and conservation value.
In his opening address on the first day of the hearing, the City of Greater Bendigo's legal representative Egils Stokans said the site's residential zoning status meant it was appropriate for development.
He said council had no dispute with the area's "high ecological significance".
"There's a legitimate expectation this site is able to be developed for residential use," he said.
"Settlement objectives have to be balanced with council's obligation to protect native vegetation."
Mr Stokans said under the proposal, almost half the site would be protected as a nature reserve and the majority of threatened species identified would be protected in the reserve.
He said the proposal avoided development in areas on the site of higher conservation significance, with the intention of minimising impacts on the environment.
"It is council's view the proposed subdivision is reasonable and practicable," he said.
"This is an acceptable balance of competing policy objectives."
The tribunal also heard from Castlemaine consultant ecologist and biologist Paul Foreman, who provided evidence about the quality of vegetation on the site based on his studies of the site.
Mr Foreman said his efforts uncovered a lot of additional diversity not previously found, that different parts on the site were quite unique to each other, and species density across the entire site was unusually high.
"The evidence is suggesting these areas are top of the pops when it comes to species density in the Bendigo region," he said.
He said any reduction in the site's current size was a "step backwards" and the agenda from a conservation perspective was to keep the site "as is".
"You also potentially could lose species in the process of losing half the bush," he said.
"My plea to the tribunal is to think about the value of the site and... why in 2015 we are looking to put a bulldozer into it."
The hearing continues tomorrow.
