Residents are expected to be living in the first 33 villas to be built by July or August next year.
Construction of the rest of the 200 homes and a care centre with rest home and hospital care facilities will take place within the next five years.
Mrs Barlow said the company would use local contractors wherever possible throughout the construction process.
The development could see up to 500 contractors employed during different stages, she said.
Summerset would employ about 40 people to manage the Katikati village, work as caregivers, look after the grounds and work in the kitchen and cafe. Western Bay of Plenty District Council Katikati ward councillor Norm Mayo said any such development could only be positive for the area. "I'm all for growth in Katikati. There's got to be provision made for our old people there's more here than anywhere else," he said. "I can only speak positively about it."
Mrs Barlow said the Katikati lifestyle was one many retirees were looking for.
"A lot of people like to be near a village or small community and like to be part of the community," Mrs Barlow said. "It's great for people who want links to bigger places and still be near the beach and have a provincial feel."
In Tauranga, 17 per cent of the over-75 population lived in retirement villages compared to 9 per cent nationally, and demand was continuing to grow, she said.