Chapel Street Under Pressure: Crime, Levies, and a Precinct in Transition

A Melbourne commercial precinct is navigating multiple simultaneous challenges, including a contested business levy, retail theft, public safety concerns, and unresolved transport conflicts. The two-kilometre stretch of Chapel Street from South Yarra to Windsor—spanning the suburbs of Prahran, Windsor, and South Yarra—has been the subject of separate legal proceedings, police operations, community rallies, and a council transport study.

Business Levy Dispute at VCAT

A group of 10 Chapel Street traders has brought a case at the Victorian Civil and Administrative Tribunal (VCAT) challenging a special rate levy imposed by Stonnington Council. The levy, introduced in 2024, is collected from approximately 1600 businesses on or near the precinct. It is predicted to generate $4,955,000 for the council over 4.5 years. Businesses pay up to $2,500 per year for one property, with a 50% discount on secondary properties.

The case was heard at VCAT last week and is due to return in June.

Trader Statements

Traders involved in the case stated they believe 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.

"Parts of the precinct had issues with vacant shopfronts and antisocial behavior." — Josh Lefers, bar owner

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. Some traders cited a 15% vacancy rate on the street and concerns about public perception following high-profile criminal incidents.

Council Position

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, and $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. Dickson stated the council has committed $4.38 million to the precinct improvement plan this financial year and will commit a similar amount next year.

Festival Funding Context

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.

Retail Crime Statistics and Police Response

Shoplifting is the most common crime on Chapel Street in Prahran, according to Victoria Police data. 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 Operations

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. Under Operation Safenight, 17 arrests were made on Chapel Street on Friday and Saturday nights in 2026.

Trader Experiences with Crime

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

"Theft is minimized through measures like zip-ties on clothes over $40 and staff vigilance." — Nava Kingston, owner of Revolution Fashionwear

Kingston expressed skepticism about reporting to police but reported strong business due to a young customer base and social media presence.

Community Rally and Broader Concerns

Approximately 100 individuals attended a rally outside Prahran Town Hall to address issues of crime, public safety, and vacant shops along Chapel Street.

Community Statements

The rally focused on local crime rates, feelings of insecurity at night, challenges faced by retailers, Stonnington Council debt, and public drug use. Speakers criticized the council's recent parking changes.

"My car was stolen and my home was broken into twice within a year." — Jonathon Kelly, Windsor resident

Kelly 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 to revitalize the area, 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.

Contrasting Perspectives

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, including issues with noise, crime, and rubbish.

A business owner stated the precinct is shifting from retail to a destination for food, drink, and services.

Vacancy Rate Data

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.

Crime Statistics

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.

Council and Government Response

Stonnington 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.

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

Transport Challenges

Chapel Street faces challenges in accommodating various transport modes. A study commissioned by Stonnington Council said the street tries to serve all users but improvements for one group may disadvantage another. The council launched a Chapel Street Transformation Project in 2022 but has not produced a plan.

Current Conditions

Issues include:

• Congested traffic
• Slow tram service (route 78, average 13.3 km/h)
• Unsafe cycling conditions (most bike crashes in Victoria, 181 from 2019-2023)
• Narrow footpaths

Only 30% of street space is footpaths despite 54% of visitors walking. Wheelchair users and parents with prams face accessibility problems due to lack of level-access tram stops and uneven crossings.

Proposed Changes

The council has called for accessible stops and low-floor trams. A speed limit reduction to 30 km/h is planned. Some suggest removing on-street parking to widen paths and add bike lanes, but traders argue parking is vital for business. The council states there are no current plans to remove on-street parking.

Future Development

Some traders expressed hope for increased foot traffic from the $3.75 billion Jam Factory redevelopment, scheduled to open in 2029.

After Dark Incidents

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.