Major earthworks began late last year to tidy up the terrace site.
Seaview Terraces Estate Ltd owner Keith Mackay previously told the Hokitika Guardian the site was being cleared in preparation for a staged subdivision.
He could not be reached for comment last week, but the Guardian understands a 300-lot subdivision is in the pipeline for about 35ha of the former Seaview Hospital land.
A retirement village, as well as residential and social housing, is also in the mix.
Westland Mayor Helen Lash said the development showed confidence in the town, and district.
She had seen draft concepts but not a final design, and understood it was moving through the early stages of the consenting process.
"It will be good for the town and it shows the confidence people have got in Hokitika and Westland."
Issues around housing at Seaview last year had now been resolved with the appropriate agencies, Mrs Lash said.
Concerns about the quality of accommodation being provided at Seaview Lodge had seen it dropped as an emergency housing provider by the Ministry of Social Development.
A number of other properties also came under scrutiny to ensure they were up to standard.
Mr Mackay, who is Christchurch-based, is the sole owner of the hilltop site, which includes several old hospital villas, staff houses, the lodge, Seaview Community Hall and the Chapel of the Holy Spirit.
He said everyone living at the site at the time was there by choice, including a number of permanent long-term tenants in houses that were fully compliant.
Others were there on a casual basis, but not in emergency housing with the Ministry of Social Development.
"We are dealing with people who have nowhere to stay and they just turn up on the doorstep.
"It's not the flashest ship, but it's providing a need."
Separately, a 12ha subdivision is being developed by local investors, nearby on the site of the former Westland Hospital.
Land to the east and west of the private subdivision is being cleared for development by Mr Mackay.
- Janna Sherman
