The proponents of the Bunnings Warehouse development application have withdrawn their application to build a store located within the old RAAF base.
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Dubbo Regional Council were notified of the decision on Friday.
The withdrawal comes after the Heritage Council of NSW refused to grant General Terms of Approval.
A statement from council said those who made a submission during the public exhibition period would be advised in writing of the withdrawal.
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The $30 million Bunnings was to be the largest in the central west if it had been approved, with plans for it to be 68 per cent bigger than the Bunnings currently on Sheraton Road.
Several residents voiced their concerns over the proposal, with a petition started to stop the application.
More than 200 people signed the petition which highlighted concerns over increased traffic, associated noise and safety issues for residents and businesses in the area.
The DA has been embedded in controversy since March, when Deputy mayor Stephen Lawrence and councillor John Ryan called for the mayor to resign over a press conference he held about the DA.
In March Cr Lawrence said the mayor's conference had undermined public confidence in the process.
"The community cares about the old RAAF base, the community cares about housing supply issues in Dubbo, and too many people have come to me and said they think that Bunnings on the RAAF base is a done deal, it's not a done deal," he said.
The mayor hit back at the allegations at the time, saying he had not undermined council processes or misled perceptions in the community.
"I've always welcomed a proposal if it goes to plan, so this nonsense that I've circumvented process is insane," Cr Shields said in March.
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