The City of Greater Bendigo this week unanimously approved a planning application by developer Phileo Australia to build a mixed retail complex on the Calder highway site that has sat vacant for five years.

The developer is proposing a retail complex with 12,870 square metres of floor space for outlets such as white goods, lighting and furniture stores as part of stage one of the centre.

Phileo has indicated construction on the project will begin when a second stage incorporating the original "dust tower" and a further 5630 square metres of retail space gains planning approval from council. A medium density housing project on the site which is part of the overall proposal will be dealt with in a separate planning application.

Kangaroo Flat ward councillor David Jones said the exciting project would provide employment and business opportunities and revitalise a long-neglected site in one of Bendigo's main gateway areas.

"This will bring together a range of retail services that will really finish off the whole precinct," Cr Jones said.

"The site has long been a bit of a blight on Bendigo and has been subject to vandalism with things like rocks thrown through windows," He said as a regional shopping centre it would attract customers from all over Bendigo and Central Victoria.

Cr Greg Williams said the site had been dogged by delays and difficulties since the Rocklea Spinning Mills closed in 2001.

"This is a site that absolutely needs development, it is crying out for it," Cr Williams said "It was a source of great frustration to the last council, but it was not the fault of council (who) were confronted with this mountain of red tape." City of Greater Bendigo chief executive John McLean explained that an application to develop the site three years ago was rejected by a panel appointed by the planning minister on the grounds that there was no structure plan.

"Since then we have put a lot of work into this and really invested in strategic planning," he said.

An overall commercial strategy for Bendigo and a more recently completed Kangaroo Flat Structure plan documented the need for growth in this area and to provide complimentary activities to other retail areas including the CBD he said.

He said the planning enabled council to understand how much retail space was needed without the risk of encouraging a glut of competing businesses. '` We don't want to get ahead of ourselves," he said.

"The council needs to show some light handed guidance on how much space is needed and the same time for businesses to remain sustainable," he said.

A developer for an Epsom shopping centre has asked Bendigo council to withdraw a planning application until environmental issues can be resolved. Mr Mclean said the Munro Corporation requested the application be held several weeks ago and until discussions with key deferral authority, Department of Sustainability and Environment, over flooding and environmental issues could be resolved.

Munro made the planning application for a shopping centre on the Midland Highway at Golf Course Road earlier this year.

The council last week Dec 13 approved a planning permit for the Wilbow corporation to build a shopping centre further north on the Howard Street reserve.

Mr Mclean said during the debate over the issue some residents had mistakenly believed council was holding up the Munro Corporation application.

"But we were acting entirely under their directions to hold the application," he said. What do you think? Write a letter to the editor. Details - Page 10.