Corowa Shire has approved the redevelopment of the property owned by Kennedy Property Investments for more than three years on a 6-3 vote.

It included a reduction in the developer contributions payable to council.

The motel will be expanded at the rear of the Corowa Road property and on land occupied by a neighbouring house.

It now comprises 10 rooms and three self-contained cabins.

The expansion includes 15 two-storey cabins, three single-storey cabins, a 25 x 8 metre lap pool, splash park, communal facilities, new access roads and parking.

Part-owner Chris Kennedy said the redevelopment would be a boost for local tourism when completed.

“Tourism is a big thing in Yarrawonga-Mulwala and will give people options and a premier place to stay,” he said.

“The motel goes well, but travelling around ourselves there is a real lack of three-bedroom accommodation for families.”

The motel, built in the 1990s, is located 200 metres from Lake Mulwala.

Mr Kennedy said the neighbouring house on the eastern side of the motel would either be demolished or relocated.

The two-storey cabins will be positioned around the property perimeter to overlook the pool area and measures have been undertaken to protect the privacy of neighbouring residents.

The cabins will be constructed off-site and transported to the property.

The owners successfully sought a 40 per cent reduction on the developer contribution payable to council.

The council’s planning and environmental services director Bob Parr said the adjustment was justified on the basis of increased occupancy rates when completed.

“The applicant submits that historical analysis of occupancy rates for the existing Ashleigh Court Motor Inn show an annual occupancy of 35 per cent,” Mr Parr said.

“It is hoped that as a result of this development, this occupancy rate will increase to 40 per cent.”

Mayor Fred Longmire and councillors Paul Miegel, Gail Law, Joan Palmer, Francesco Bruinsma and Fiona Schirmer supported the proposal.