A couple of points. Being a request for a spot rezoning (not a Development Application for those not familiar with the planning process), even if Council support this, it still needs to get through the Department of Planning. This may well prove to be a bigger obstacle than Council as spot rezonings aren't often looked upon too well, particularly when you start to fragment rural and environmental lands. Not to rain on your parade, because I would love to see this get up, but I can't see the Dept altering the zoning under the template LEP.
Back to the report, some comments from me taking into account I've not seen whats been submitted to Council. As I see it there are three main issues,
Fragmentation of Rural/Environmental Lands - This is an issue state wide and does preclude a lot of properties from rezoning and development unless identified in a strategic planning document.
RTA - this could be an issue at the DA stage under SEPP (Infrastructure), depending on the classification of the road, RTA concurrence may well be required under Schedule 3. If they don't like it, and it looks like they have concerns, then Council is powerless even if they wanted to support it. Given the RTA does not support the rezoning, Council may be taking the stance that this issue also makes rezoning the land a futile exercise.
Environmental Issues - The crux here seems to not be so much with the impact of the track (although it is good they have really not covered the impact of spectators in detail), but more so the location and operation of the carpark, camping facilities. Maybe here it is best for now to go back to the original layout that Council was supportive of. If this takes away this issue then you can re address it at DA stage.
It is good to see the social need for the facility acknowledged by the Council, this often doesn't happen, but I think the first two issues are going to be pretty major things for Council to resolve. I wouldn't be surprised if this gets deferred for a site inspection.