Local residents have been mystified by an oval structure taking shape high on the foothills of Mount Buninyong.
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The work in progress, which began last month, is visible from the Midland Highway as well as from Yendon Number 2 Road.
It looks identical to the design of one of the 'skybarrels', a controversial luxury accommodation project at 67 Yendon Number 2 Road that is still in the planning stages.
The project has proved deeply unpopular with the local community, attracting 57 objections to the planning permit application, with five submissions in support.
Councillors unanimously voted against supporting the project last month. The plans are due to be considered by the Victorian Civil and Administrative Tribunal later this year.
It has left many wondering how building work can take place when approval for the project is still being contested.
The answer lies in the building regulations, which allow for a single dwelling to be constructed on Rural Living Zones without a planning permit.
Building approval has been granted by a separate surveyor - not by the council - giving the green light for work to take place.
In Rural Living Zones, single dwellings can be built on land parcels over four hectares in size without a planning permit.
We knew something was happening. Suddenly a big crane turned up, and the bottom of the barrel was erected
- Andrew Lorensene
Andrew Lorensene, whose property on Yendon Number 2 Rd is overlooked by the structure, told The Courier he was "horrified" when he saw the building work take shape. He said he had seen excavators and cement trucks on the site before work began.
"We knew something was happening. Suddenly a big crane turned up, and the bottom of the barrel was erected.
Residents wondered how the controversial design was going ahead.
"There's nobody too happy about it, we have people pulling up outside saying, 'how the hell did they get up there, I thought it was all closed down until VCAT'".
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While the work is permitted for the single dwelling, Mr Lorensene said he remained resolutely against the broader accommodation project, which he believes is against the spirit of the Rural Living zone. He said the Buninyong area should have had more planning protections to prevent development of that sort.
"It is a high density build on a small part of the property," he said. "It's an in-your-face project."
A City of Ballarat spokesperson said: "There is building approval for development of a single dwelling on CA3 Yendon No 2 Rd, Buninyong which was exempt from planning approvals under both the zone and overlays."
"Given the planning exemptions and given the building permit was issued by a private building surveyor, Council is unable to comment further."
The work is being carried out by Colac-based Spence Construction.
The Courier is not suggesting the construction is contrary to building regulations.
A compulsory hearing for the 'skybarrels' project took place on March 2 earlier this week, but there was no resolution. A VCAT hearing is scheduled for May.
The developer, David Penman, initiated the VCAT process, saying a permit had not been granted within the statutory time limit.
The application was originally submitted to council in early June, and was later publicly advertised. The application to VCAT was made in late October.
The City of Ballarat went into caretaker mode for several weeks due to the council elections around that time.
Under the plans, five 'skybarrel' structures were earmarked for the land, with planning documents saying they would attract high-end tourists willing to pay up to $1,000 a night.
The location has extensive views looking out over Moorabool Shire. Yendon Number 2 road marks the border between the City of Ballarat and the municipality to the south.
If approved, four of the 'skybarrels' would be identically shaped. One longer construction was slated for further up the hill.
A further shipping container dwelling would be built in the north-eastern corner of the property.
The land, which stretches across a very steep parcel of land, was purchased last year .
Extensive earthworks have also taken place in the area, a drone image suggests. The image, seen by The Courier, was legally taken from above a neighbouring property.
Mr Penman was contacted for this article but did not wish to comment.
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