It would be on the western side of Sandflat Rd, about 4km southwest of Cromwell's town centre, along State Highway 6 towards Queenstown and across the road from Highlands Motorsport Park.
The Central Otago District Council's planning and environment committee will today consider a request from River Terrace Developments Ltd to apply for a private plan change to rezone the land to allow the development.
A report from council planning team leader Ann Rodgers recommends accepting the request, and then publicly notifying it for submissions.
The nearly 50ha site would also contain a retirement village, a retail centre, medical centres and possibly a school.
The directors of River Terrace Developments are Christopher and Michaela Meehan. They are responsible for many other property developments in the wider district, including
Northlake in Wanaka and Bridesdale in Queenstown.
Highlands Motorsport Park chief operating officer Josie Spillane said she supported new development, but it needed to be done correctly.
``We welcome any development that will assist the growth of Cromwell ... It just needs to be managed and located correctly.
``We are concerned about the effects that will inevitably rise from residential developments in the vicinity [of the motorsport park].''
Sandflat Rd resident Rex Edgar, who lives on a 2ha property directly beside the proposed development, said the previous land owners, a family trust, put the land up for sale last year.
``Next thing I know a land agent came and saw us and said that the people who bought the land wanted to buy our property.''
The Edgars refused to sell and were surprised and disappointed to see surveyors putting in pegs already, when they had been told no work would be done on the land in the next 10 years.
The Edgars' land and a water treatment plan further down Sandflat Rd are not included in the development plan.
Near retirement, Mr Edgar said he was not happy about new housing springing up around his semi-rural home.
Mr Meehan did not respond to a request for comment yesterday.
Central Otago Mayor Tim Cadogan said he could not comment as he was voting on the application today.
Two other private plan changes paving the way for subdivisions in Cromwell have been approved recently - at the Cromwell Top 10 Holiday Park where there will be 173 sections and Wooing Tree vineyard where there will be 210 sections.
- Additional reporting Simon Henderson
