And there's the problem. Woodwynn's initial proposal was given the cold shoulder by council. Woodwynn went ahead anyway which forced council into taking an even harder line. Both sides are entrenched and now there's a lot of bad blood.
The ALR concerns are valid. Any exception to the ALR rules might inspire some greedy developer to exploit loopholes, carving out more and more chunks of farmland for development. However, there are always ways to ensure worthy exceptions are strictly one-offs that can't be replicated elsewhere.
Lots of people every day get their permits and applications rejected by a City council somewhere. Most don't then go ahead and proceed anyways hoping that the City won't enforce the rules.