Justin Hemmes wants to turn this CBD block into a 24/7 venue. One problem: Jerry

Justin Hemmes has spent tens of millions of dollars attempting to buy out every owner of half a block of CBD offices and apartments as part of a years-long campaign to build a giant 24/7 entertainment and hotel precinct.

Papers lodged with the City of Sydney last month reveal his Merivale company’s plans to transform six buildings on King, Clarence and York streets into a hotel, underground nightclub, jazz club, supper club, restaurant and cafe, sports bar, health spa, gym, restaurant and lounge, an internal courtyard, and offices.

Hotel CBD, on the bottom of the corner of York and King streets, is one of several buildings planned to be developed.Credit: Steven Siewert

The lodging of the concept development application (DA) is a step taken before specific DAs are lodged for each site and represents years of work in collecting land on the sites: almost every single land title across the buildings is now owned by JH CLARENCE #2, a company registered in May 2022 with Hemmes as its director.

But the hospitality mogul is already facing fierce resistance from a small group of residents and business owners who have refused to sell to him – and who fear they will be kicked out of their own units or offices despite legally owning them.

Merivale already operates Hotel CBD, its oldest venue, on the corner of King and York streets. It is included in the DA.

Owners and residents revolt

Jerry Chen is one of the key people standing in Hemmes’ way. The finance worker is the only owner in the heritage-listed 104–118 Clarence Street apartments who has refused to sell to the hospitality giant. He says he and other residents in short-term rentals in the block fear they could be forced out at a moment’s notice by Merivale if the City of Sydney approves the plans.

Jerry Chen is leading the fight against Merivale’s plans for a huge hospitality precinct in the CBD.Credit: Steven Siewert

Despite owning his flat, Chen said he was concerned about what action the strata could take now that most members were Merivale representatives.

He and other residents – most of whom declined to speak publicly – have lodged objections to the proposal with the City of Sydney. In a two-page memo, the group expressed anger at the removal of potential housing during a housing crisis.

“Mixed-use areas that include residential spaces are essential for creating vibrant, sustainable communities,” the objection read. “By converting this site into an exclusively commercial and entertainment-focused precinct, the proposal undermines the social fabric of the area and contributes to the erosion of liveable, balanced urban environments.”

However, the residents in the affected apartments are joined by businesses that own land included in the development application. John and Anna Arcidiacono, who own offices on a neighbouring block, wrote in a submission to the council that the DA included the use of their car spots.

The buildings included in the concept DA, according to Merivale’s submission to the City of Sydney.Credit: Merivale/NearMap

“We have a number of concerns about the proposal, including that it proposes use of land that we own,” Anna Arcidiacono wrote.

“We have not given owners’ consent to the application.

“The proposal to council involves proposed use of our car parking area … but the proponent has no right or agreement to use that area at all, and the space is required for use by us.”

Noise complaints

The block is within one of Sydney’s four Purple Flag districts, a globally recognised accreditation program highlighting areas of good dining and entertainment, which is meant to act as a drawcard to the area. It is also home to several residential complexes, including the award-winning Arc apartments on Clarence Street.

An indicative cross-section of Merivale’s plans for the site, looking on from King Street.Credit: Merivale

But if the residents are allowed to stay, Chen, who has lived in the city for almost a decade, said the noise of a 24/7 nightclub would be enough to drive the last residents out.

“If you have a 24/7 nightclub running all the time, just imagine the chaos, the disturbance, the noise pollution. We understand the city’s a mixed-use zone. There are specific zones for [entertainment] on George Street. There are enough nightclubs in the city as is to cater for everyone’s interests.

“They’ve not provided any kind of solution to the people who live there. It’s kind of like a David versus Goliath battle.”

Merivale – which has faced claims of exploitation from some female staff, which it denies – did not answer the Herald’s questions about its plan for residents or other owners on the site. Sue Cato, a corporate communications specialist appointed by Merivale, said in a statement that the concept DA sought a “precinct-wide approval over five of the Merivale buildings”.

“Prior to lodgement, Merivale undertook a comprehensive consultation process, including correspondence and briefings, with thousands of surrounding residents and business owners,” Cato said. “It was a completely positive process with wonderful support received from residents and businesses alike.”

The City of Sydney will consider the proposal next year.

Start the day with a summary of the day’s most important and interesting stories, analysis and insights. Sign up for our Morning Edition newsletter.