A photo montage from the PAC report showing what the completed Bank Street development would look like.

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The City of Sydney council has joined a Pyrmont residents’ group in expressing concern over the approval of an educational and museum facility for the Sydney Heritage Fleet (SHF) in Bank Street.

The development, underneath the deck of the Anzac Bridge and fronting onto Blackwattle Bay, will also serve as a berthing point for the Fleet’s vessels, which have struggled to find a permanent home.

The Pyrmont Community Group (PCG) has been critical of both the development and the approval process by the Planning Assessment Commission (PAC), which gave the site conditional go-ahead in February. But, the PCG has since called on council to back their case for planning power to be returned to local authorities.

“The amount of open space for the population there is woefully inadequate, and there are other sites on the harbour that could be used for this education centre,” said Máire Sheehan, a spokesperson for the group. The state government’s 2006 Bank Street Master Plan earmarked the land for public recreation.

“[The PAC] is a bureaucratic committee making a decision on an application. They don’t have a community advocacy role like council would have,” Ms Sheehan said.

“We don’t have any control over such matters and have had to comply with them in the same way as any other DA applicant,” said Ross Muir, the fleet’s general manager.

The SHF, which operates and maintains a collection of heritage vessels, has long sought to relocate its overhaul and restoration facilities, currently at Rozelle Bay. The Bank Street site was originally slated for these facilities, but following community outcry about potential noise and pollution in 2012, SHF removed this aspect from its plans, leaving only an educational facility.

“Sydney Heritage Fleet has been in existence for 50 years and has never had a home,” Mr Muir said.

“We were disappointed … to withdraw that component of the DA from it, but in response to the residents’ attitudes, we did.”

The organisation will be forced to keep looking to move its maintenance base.

The PAC granted conditional approval to the education facility, pending a revision of the DA to include a 2.5 metre setback from Bank Street and other minor alterations.

But, council has joined the PCG in condemning the process.

“A project of this kind does not warrant state significant status and should never have been taken out of the City of Sydney’s planning jurisdiction,” a council spokesperson said.

“The removal of industrial ship-building functions from the development was an important early change championed by the City, as was the introduction of 24/7 public access to the foreshore and the reduction in length of the main wharf.”

State MP for Sydney Alex Greenwich concurred with council.

“Both the master plan … in 2006 and the local environment plan zone it for open space,” Mr Greenwich said.

“I share the community’s concern that that should be maintained, and that the community continue to have a role in influencing planning decisions in the area.”