"This is the best thing that ever happened to Kingston," local resident and business owner Peter McEntyre said.
When the Queenstown Lakes District Council ratified Plan Change 25 for Kingston on Tuesday, it allowed an 88ha area to be developed by Kingston Village Ltd.
Today, the township has 200 dwellings, and the new development has room for 500-700 new homes, along with sites earmarked as employment area, education precinct and open spaces.
"People have accepted that some changes will inevitably happen to Kingston over time. What matters to the community is how it is handled," said Peter Gibson, chairman of the Kingston Community Association.
Mr McEntyre owns the Kingston Cafe and Bar at the corner of Kent St and State Highway 6.
While his business relies mostly on passing tourist traffic, he welcomes a larger township.
"Kingston needs more people and a bit of industry as well, to become a vibrant and independent village. It seems apparent now that the Kingston Flyer is not operating," he said.
The vintage steam train the Kingston Flyer has been offered for tender and a United States company has expressed interest.
The train still attracts visitors, who stop for a photo.
The tavern next to the Kingston railway station has pushed its usual 8am opening time to 4pm, but tavern duty manager and local mother Sonia Stewart is still positive about the township's future.
"Progress will happen, and Kingston really needs positive development. We have a strong community spirit here, and this development will be a good thing for the community," she said.
Mr Gibson said the main reason for the community to back the Kingston Village development was the hope it would lead to better services like water and sewage for the township.
"The village does not have reticulated water or sewage, and the council has not been willing to pay for it to be installed. At least this development will drive the much-needed improvement of our infrastructure," he said.
As part of the plan change, the developer would be obliged to install water and sewerage systems for the new subdivisions, and thereby pay for the basic structure.
Senior policy analyst Ralph Henderson, of the QLDC, said existing properties could be connected to this new infrastructure, as it must be built to allow for growth.
"The community must be prepared to meet at least some of the cost. It will be up to the community whether they want to be connected to a new water and sewage system, but joining in at the planning stage might be cheaper than joining later," he said.
Kingston Village Ltd partner Ian Pillans said the developer was working on offering the community a solution at a lower cost than the options the council has presented.
Three well attended workshops had been held for the community to discuss the plan change.
A main concern raised was the need for Kingston to retain its own identity.
"People want the township to stay as mainly residential and with 'low-key' tourism and holiday homes. They do not want it to turn into a small version of Queenstown," Mr Gibson said.
"Arrowtown is an example of a local town which has grown but kept its village feel. If it is looked after properly, Kingston can also keep its unique atmosphere," Mr McEntyre said.
The developer agrees with the sentiments of the local community.
"The last thing we want is to create a satellite suburb. We aim to create an integrated and self-sufficient village with its own identity. The open spaces, walkways and plantings will support this," Mr Pillans said.
The plan change process has been ongoing since 2006 as a joint venture between the council and Kingston Village Ltd.
Submissions could be sent in until May, and a hearing would be held in September.
The plan change is still subject to appeals until February.
Only then can the subdivision process begin.
"I expect it will take most of 2010 to go through the consent process for the subdivision, so I am not contemplating any construction until 2011. During 2010, we will work on the engineering of all the infrastructure. [The year] 2012 looks like a realistic time for the complete existing township to be connected to a new water and sewage system.
"It will take at least 25 years to complete all stages of this development," Mr Pillans said.
Another proposed development in Kingston was stalled when the company behind the Kingston Flyer went into receivership.
Mr Pillans is confident this will not happen to Kingston Village Ltd.
"We are very solidly funded financially, and will have no problems funding the infrastructure before the first release of sections are ready for sale," he said.
Mr Henderson said there would be further consultation with the community about infrastructure issues.
