The development application, tendered to council on Tuesday, proposes a complex comprising five residential units, four retail tenancies and a basement carpark on the Nibbles Takeaway block.

Council approved the DA but said the proposal "inadequately accommodates the demand generated from the proposal" and under their off-street parking policy required the owners, Pat Sergi and Robert Cappello, to provide an extra 14 spaces to meet requirements. But building designer Zep Lanza said the requirements were unrealistic and unfair and the extra $130,000 cost to the owners to include those spaces would make the development unfeasible.

"If you look at the site it's not physically possible to have an extra 14 car spaces," Mr Lanza said. "Planning laws at the moment, in particular for parking requirements, are killing development. Businesses are not coming to town because of all the restrictions in place.

"Council needs to be proactive. They have got to do something with the car parking regulations to entice existing building owners to redevelop their buildings, give them a reason to develop their land. There are too many obstacles at the moment."

Under the council's Development Control Plan the proposal is required to have 22 onsite car parks. But Mr Lanza said council should provide a concession for eight spaces as they were developing an old building and, as the site will be a mixed development, there will be a variation in peak demand for the spaces so at no time will 22 cars need parks.

Adding in the seven parks proposed in the plan, plus an additional two Mr Lanza said could be added to the development, and one concession the developers believe should be given for a visitor space, gives the development a shortfall of four spaces, which Mr Lanza said could be serviced by on-street parking.

Addressing council on Tuesday, owner Mr Cappello called on council to think seriously about the future of development in Griffith. "We need to encourage guys like myself and Pat and other developers and not impose costly additions," he said. "We're prepared to take risks to develop the top end of town and set a precedent for other developers in town."

Mayor Mike Neville said council will review its off-site parking policy and should return within three months with a solution.