The entire length of the main avenue in Lija town centre as well as Villa Gourgion has been listed - a move that will effectively signal the end for the contentious permit for an apartment block close to the landmark belvedere.

The development, a block of eight flats and penthouse on four floors, complete with underlying garages, less than 20 metres from the belvedere, was approved only last September to the dismay of residents and the local council.

The developers will now be seeking compensation for lost revenue from the sale of the flats, their architect Robert Musumeci told The Sunday Times yesterday.

The belvedere is an iconic landmark, which, the local council had insisted, would be ruined by the development. It had also warned that granting permission would set a precedent for other multi-storey developments in the area.

The block would have replaced a villa and its garden and opponents of the development said this would have lured other developers to target the town's main avenue leading to the church.

The Malta Environment and Planning Authority now appears to have had a radical change of heart. The listing, which incorporates Villa Gourgion and Transfiguration Avenue, which leads into the village core, will retroactively nullify the permit issued last September.

Mr Musumeci said he was not contesting Mepa's legal right to list the area but questioned the timing. It would have been "more opportune", he said, had the area been listed earlier, sparing his clients the uncertainty.

Mr Musumeci said the developers would be seeking compensation though it is not yet clear how high this claim would be.

"I cannot give you a figure because I haven't done the costing, but we're talking big money," he said, pointing out that essentially the developers will be asking to be compensated for the revenue they would have made if they went ahead with the project, which was set in one of Malta's more upmarket residential areas.

There are specific provisions in the Development Planning Act enabling the authority to compensate developers in precisely this circumstance - when a valid permit is nullified for the purposes of listing.

"I believe this is the first time this part of the law is being applied," Mr Musumeci said, adding that he would discuss this issue with the recently-appointed Mepa chairman Austin Walker as soon as the official notice regarding the permit's revocation was issued.

Mr Walker said that the issue was raised after the board was asked to review the listing of the villa.

"After I was made aware that the villa and belvedere were once part of the same thing, it seemed to me that we couldn't list one without the other," he said. "And besides, the listing will protect the belvedere from being overpowered."

He acknowledged that now the developers had a right to request compensation but said he would rather not comment further at this stage. "I am aware that there may be repercussions to the listing but that is besides the point to a certain extent...

Residents and Lija council had objected strongly to the development, presenting a petition signed by 143 people.

The mayor, Ian Castaldi Paris, welcomed the news, saying that it was a just reward for residents' efforts to safeguard the town centre.

While noting the arguments against the project and the effect that the development would have on the belvedere, Mepa's case officer still recommended its approval.

Like other similar cases, the authority's Culture Heritage Advisory Committee had been critical of the application, saying that the development would "seriously jeopardise" the tower's context, if approved.

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