A controversial plan to build a $95 million hotel, office and theatre on the Ace Cinemas site in Subiaco has been given planning approval.
The proposal to demolish all existing buildings on the Hay Street site for six-storey and nine-storey towers was rejected by Subiaco City Council earlier this year.
But a State development assessment panel agreed to pass it with conditions on Thursday.
Subiaco mayor Heather Henderson said the development began a revitalisation of Subiaco.
She expected it to draw large numbers of people to Subiaco, particularly tourists and business people to the hotel.
Ms Henderson was not concerned the development would set a high-rise precedent for Subiaco, with all proposals to be considered on merit.
"The benefits are the opportunity that there will be for employment in Subiaco, to bring in hundreds of workers and hopefully a number of tourists to enjoy our city," she said.
Developer Dradgin Pty Ltd forecast the development would bring $200 million into Subiaco over 10 years.
Cr Julie Matheson said the development would draw people but its design did not match Subiaco's character and the developer failed to address council's concerns in that area.
"The design is more reflective of a new building in Perth," Cr Matheson said.
Subiaco Business Association president Geoff Parnell, who accused the council of being anti-development when it refused to endorse the development in May, hoped the decision would pave the way for other developments of its kind.
He said Subiaco was struggling "a bit more than most" because few initiatives were being put forward to enhance the area and short-term accommodation would ensure tourists and business people spent more time there.