Chapel Street Turmoil: Levy Challenge, Crime Wave, and Community Uproar

A special rate levy, a shoplifting crisis, and a community rally expose deep tensions on one of Melbourne's most iconic strips.

Legal Challenge to Council Levy

Ten Chapel Street traders have brought a case at VCAT against a special rate levy collected by Stonnington Council from approximately 1,600 businesses on or near a two-kilometre stretch of Chapel Street from South Yarra to Windsor.

The levy, introduced in 2024, is predicted to generate $4,955,000 over 4.5 years. Businesses pay up to $2,500 per year per property, with a 50% discount on secondary properties. The case was heard at VCAT last week and is scheduled to return in June.

Traders involved in the case stated they believed the levy funds were intended for marketing and promoting the precinct. They expressed concern that funds are also being allocated to services they stated should be covered by standard rates, such as street cleaning and graffiti removal.

Josh Lefers, a bar owner involved in the action, stated parts of the precinct have issues with vacant shopfronts and antisocial behavior. Justin O'Donnell, former president of the Chapel Street Precinct Association, stated traders feel they are being "double-dipped." Martha Tsamis, owner of Chasers Nightclub, suggested levy funds could be used to revive the Chapel Street Festival, which has been postponed in recent years.

At the VCAT hearing, a lawyer for Stonnington Council disputed that marketing and promotion was the primary purpose of the levy. The council's Chapel Street Precinct Improvement Plan for the current financial year allocates:

• $735,000 of $1.1 million in levy revenue to strategic marketing and "activations"
• $315,000 to cleaning
• $50,000 to a Salvation Army outreach program

Council chief executive Dale Dickson stated the vast majority of levy funds for 2025-26 are allocated to marketing and promotion. He stated the council has committed $4.38 million to the precinct improvement plan this financial year and will commit a similar amount next year. Dickson stated the council considers its overall relationship with Chapel Street businesses to be positive, "with the exception of a small number of vocal individuals."

In 2022, the Chapel Street Precinct Association received a $450,000 state government grant to revive the festival; $100,000 was released for the festival, with the remainder redirected to other local events.

Crime, Theft, and Police Data

According to Victoria Police data, shoplifting is the most common crime on Chapel Street in Prahran. In 2025, there were 550 reported theft incidents and 276 arrests. Ten repeat offenders are responsible for nearly one third of all offences in the area.

Police conducted a three-week blitz called Operation Embrace, ending April 25, 2026, which increased police presence. Acting Superintendent Georgie Swinton stated that the goal is to keep the community safe and hold offenders accountable. Shoplifting fell by 12% in 2025, which police attribute to successful operations. A dedicated online retail theft reporting system will be introduced for the southern metropolitan region, including Chapel Street, on May 18, 2026.

"Alcohol accounts for over one third of shoplifting incidents; other commonly stolen items include clothes, cosmetics, and groceries."

Some traders expressed frustration, believing that reporting crime is futile due to inadequate penalties. One store owner said theft is worst south of Commercial Road, with major brands like Nike, Sunglasses Hut, and Dan Murphy's affected. Coles chief operations and supply chain officer Matt Swindells called the Chapel Street supermarket a "challenge store" and noted organized theft as a serious problem. The store previously played opera music outside to deter criminals. An independent bottle shop manager, who requested anonymity, described shoplifting as "rampant" and said his store no longer reports theft.

Nava Kingston, owner of Revolution Fashionwear for a decade, said theft is minimized through measures like zip-ties on clothes over $40 and staff vigilance. She expressed skepticism about reporting to police but reported strong business due to a young customer base and social media presence.

After dark, concerns include violent crime and poor behavior. In March 2026, a suspicious fire destroyed nightclub Love Machine, site of a 2019 fatal drive-by shooting. Hoon drivers performed burnouts in July 2025.

Community Rally and Broader Concerns

A rally, attended by approximately 100 individuals, was held outside Prahran Town Hall to address community issues including crime, public safety, and vacant shops. Speakers criticized the council's recent parking changes.

"Jonathon Kelly, a Windsor resident, reported his car being stolen and his home being broken into twice within a year." He noted a decline in Chapel Street's status as a shopping destination.

Tim Morffew, owner of Thurston and Howell boutique, stated that retailers are struggling, and his staff and customers frequently encounter aggressive and antisocial behavior. Felipe Strahovsky, a South Yarra local, expressed concerns about his children encountering syringes and bottles in public spaces.

Rally co-organizer Gary Mann advocated for creative solutions from authorities, suggesting increased greenery, pop-up shops in vacant premises, footpath repairs, and stricter liquor laws. Co-organizer Natalie Doherty described feeling unsafe in Prahran, encountering individuals yelling and stepping over vomit, feces, and syringes.

Judy Gold, a Windsor resident who did not attend the rally, acknowledged an increase in rough sleepers but views it as a broader societal issue. She maintained that the area remains suitable for raising a family and noted that Chapel Street has historically experienced periods of both prosperity and challenge.

Data from late January indicates a 15.3 percent vacancy rate for shopfronts on Chapel Street. This compares to 10.1 percent on Fitzroy Street and 6.7 percent on Acland Street.

Council and Government Responses

Council chief executive Dale Dickson stated that the mayor offered to meet rally organizers but received no response. He indicated that many of the issues raised fall under the responsibility of the state government. Dickson defended the new parking fees as comparable to those in other council areas.

He also mentioned a commissioned review of Chapel Street lighting and an additional 825 hours spent on precinct cleaning in late 2025. Dickson disputed claims of a $100 million council debt, clarifying that the forecast debt of $73.9 million by the end of 2025-26 is manageable and within borrowing limits. He added that council officers are increasing joint patrols with police, and the council has invested in Prahran police station CCTV and supported outreach services.

Crime statistics show a 6.5 percent increase in total criminal incidents in Stonnington in 2025 compared to 2024, with stealing from motor vehicles being the most common crime. However, police reported a 7.5 percent decrease in crime on Chapel Street and a 12 percent decrease in retail, serious, and violent crimes during the same period. Under Operation Safenight, 17 arrests were made on Chapel Street on Friday and Saturday nights this year.

A Victorian government spokesperson acknowledged the need for ongoing work to ensure community safety, citing crime crackdowns such as changes to bail laws.

Not all traders share the view of decline; one business owner stated the precinct is shifting from retail to a destination for food, drink, and services. Some traders expressed hope for increased foot traffic from the $3.75 billion Jam Factory redevelopment, scheduled to open in 2029.