Balkan Restaurant in Darlinghurst could be demolished and forced to close if new plans for the site are approved

Freehold Capital submitted a development application earlier this year to knock down and redevelop three Victorian terrace shops at 251-255 Crown Street, while retaining and integrating the Balkan Restaurant at No. 249 with the wider complex.

It is understood that the owner of the 60-square-metre corner property at number 257 refused to join the amalgamation deal.

An artist’s impression shows the new plans for the Darlinghurst block, where the Balkan Restaurant building has been removed. Image: SJB Architects

The previous proposed Darlinghurst development showed the Balkan Restaurant building to the right. Image: SJB Architects

But the City of Sydney objected to those plans for a six-storey building, which was about two storeys higher than the permissible height, and was not willing to make concessions on the building’s scale, public documents state.

This drove the developer to propose spreading out and developing on the restaurant’s land, as well as reducing the overall height from six storeys to five.

“In order to achieve the required floor space for the project while reducing the proposed building height to address council’s concerns, it is now proposed instead to entirely remove the Balkan,” it wrote.

John Bacic, who owns the Balkan Restaurant opened by his parents, told Commercial Real Estate they could close down for good if the development application was approved by council.

“We’ll obviously have to look for a new site, but there’s a lot more costs and money (involved). We might even consider not even reopening again if it happens,” he said.

The rear of No. 255 has housed vinyl record shop The Record Store for 15 years. Photo: Supplied

What the rear of the properties, on the corner of Goulburn Street and Arnold Lane, could look like if the development plans are approved. Image: SJB Architects

“(The cost) is a lot, you’ve got to be lucky and find a place that is an existing restaurant that has sold and that’s when the costs are a lot lower. But to do a restaurant – kitchens, cool rooms all that sort of stuff, grease traps – it costs hundreds and thousands of dollars.”

Mr Bacic, who has negotiated a lower rent with the landlord due to the uncertainty of the property, is hopeful that the plans will not be given the green light.

“I don’t think it’s going to get approved so that’s my opinion… but you never know with councils.”

While the landlord has not offloaded the building to the developer yet, the property will be sold if the development goes through.

“I think it’s disgusting what they’re doing in the area, getting rid of all these old buildings and putting high rises up. It just doesn’t look good, especially our building, it’s got a bit more character than the others,” Mr Bacic said.

The row of four affected properties as they are now. Photo: Google Maps

The 160-square-metre property housing the Balkan Restaurant was built in 1938 as a funeral parlour. The interwar ecclesiastical-style building is not heritage listed.

Co-owner of vinyl record retailer The Record Store Stephan Gyory previously confirmed to Commercial Real Estate that he would also have to move out from the premises behind 255 Crown Street when the time comes.

A spokesperson for SJB Architects, which designed the proposed building, said the firm and Freehold Capital “love to re-imagine existing buildings for new uses where possible”.

“After working closely with council, we determined that the benefits of consolidating the site and reducing the overall height of the building by a storey and presenting an integrated street presence was preferable to maintaining the former funeral chapel,” they said.

Freehold Capital director Luke Calpis said his proposed building would bring “significant amenity” to the surrounding area if approved.

The developer Luke Calpis says the new development will be the first of its kind in the suburb in more than a decade. Image: SJB Architects

“There has not been a brand new offering to Darlinghurst of this size – 2300 square metres with a mix of retail [and] commercial – in over 10 years,” he said.

“I am very excited to develop this landmark site in Darlinghurst. I can’t wait to deliver an A-grade office building that is like no other.”

The developer added that the appetite for commercial property was growing.

“The commercial market is extremely strong at the moment; over the past five years, more and more sites have been converted to residential while the demand of commercial has just gotten stronger and stronger,” he said.

“I see the commercial market next year surpassing $1000 per square metre in good quality office space due to the demand being so strong and the fringe becoming more and more popular with technology (and) advertising companies.”