Ryman Healthcare has scaled back plans for a 400-resident Australian seaside retirement village in the Victorian countryside but environmentalists say they still remain worried about the threat to a koala habitat and other wildlife in the area.

Ryman wants to build the Mount Eliza Retirement Village on the exclusive Mornington Peninsula, a popular weekend, holiday and retirement area south of Melbourne. The business says it has heard residents' concerns and redesigned and scaled back its plans which are not yet finalised.

Gordon MacLeod, Ryman chief executive. Photo/Nick Reed
Gordon MacLeod, Ryman chief executive. Photo/Nick Reed

"We've been talking to the community for some time and we've held open days to get feedback on our plans prior to them going to council for approval," a Ryman spokesman said this week.

"After consulting with a number of groups, including our immediate neighbours, we redesigned the original scheme, scaling back the buildings."

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One apartment block has been removed from the project, now set back further from the foreshore, he said.

"We're still working on what else we can do to address their concerns before we apply for approval. It's a beautiful site and we want to build a village the community is happy with, and one that will meet a need for quality retirement living options and care on the Mornington Peninsula."

Ian Morrison, public officer of the South Eastern Centre For Sustainability and convenor of Mount Eliza Community Alliance, said some people still remained unhappy about the smaller village.

"A koala now lives in the gum trees along Kunyung Rd, Mt Eliza very close to the proposed and locally-opposed Ryman property," Morrison said.

The historic gatehouse at Ryman's Mount Eliza property. Photo/Ryman Healthcare
The historic gatehouse at Ryman's Mount Eliza property. Photo/Ryman Healthcare

"We are concerned about securing this koala's future safety and its habitat would be cut back under Ryman plans for the unacceptable suburban development of a beyond the urban zoned area. Our Mornington Peninsula Shire Council is against this development proposal and we are uniting the Mt Eliza community to oppose it too," Morrison said.

The former hotel, Mount Eliza, on Ryman's property. Photo/Ryman Healthcare
The former hotel, Mount Eliza, on Ryman's property. Photo/Ryman Healthcare

"We have another species of southern growler frogs on a decommissioned dam directly opposite the proposed Ryman site but no road kill has been sighted by us locals. We sight mainly ring tail possums as road kill and the occasional blue-tongued lizard which are common on both sides of Kunyung Rd."

But a Christchurch-based Ryman spokesman indicated the business was extremely aware of environmental effects and had already heard and acted on local concerns.

Ryman's land was originally part of Australian airline founder Sir Reginald Ansett's estate. Environmentalists initially fought for the prime 22ha beachfront block to be preserved as a wildlife habitat.

The company paid close A$40 million ($42m) for the property in 2016.

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The bigger rural block had belonged to the RM Ansett Trust, and was for sale via a long-running expression of interest process.

The Ryman spokesman said the site had more recently been a campus for the Melbourne Business School and had a number of buildings.

"Our plan is to redevelop it into a village for about 400 residents, fully restoring the historic gatehouse and main building. The proposed village includes independent living apartments and a full care centre – including a dementia care unit – to meet the needs of the Mornington Peninsula's retired population," he said.

The 8.9ha site is 45 minutes from Melbourne and was built as a country estate by James Grice in 1888, he said.

"It was later owned by Sir Reginald Ansett who turned it into a luxury hotel, but the property is best known as a university campus. We announced the purchase of Moondah Estate in September 2016."

A 260m beachfront strip and heritage covenants on the gatehouse and some restrictions on the main building were features of the site.

The South Eastern Centre for Sustainability last month posted on social media: "Gig on the Green, sponsored by Rymans - all are welcome to explain why five-storey buildings on a green wedge beyond urban growth zone, is a no-no. Enjoy the music while talking to friendly musos why Rymans shouldn't be trying to buy goodwill by sponsoring youth activities when Rymans are after the millionaire retirees that undoubtedly live in Mount Eliza village."

Ryman is New Zealand's largest retirement village owner/developer, with a market capitalisation of $5.6b. Its shares are today trading around $11.20.