The town's community development association has welcomed the proposal in the hopes that it could result in the removal of the dilapidated Silver Sands and add to the high-end tourism options on the East Coast.

Submitted to Glamorgan-Spring Bay Council on behalf of millionaire owner Jan Cameron, "The Rookery" includes above-ground pedestrian boardwalks between the units, native revegetation and penguin nesting boxes.

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"The goal of The Rookery development is to use the valuable headland site to re-imagine an environment which will protect and foster the penguin population and create a place of relaxation and respite for guests," the plans state.

BirdLife Tasmania's Eric Woehler developed a little penguin conservation plan for the development, given its proximity to about 10 breeding pairs. He recommended one-way fencing to allow penguins on the site to leave safely, the addition of 40 nest boxes and construction from April to August to avoid breeding season.

Penguins should be protected by a strict "off-limits" policy for guests and staff.

Dog attacks have resulted in substantial penguin deaths in Bicheno in recent years, resulting in a recommendation for a "dog-friendly detour" on the Foreshore Walk.

The development will cover only 40 per cent of the previous Silver Sands footprint, allowing for extensive landscaping works to remediate the area.

Jenny Logie, of the Bicheno Community Development Association, said the proposal had so far received generally positive feedback from the community.

"Everybody that I know of is delighted that something is happening there," she said.

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"Some comments have been that it might not be what they would choose, but it would be so much better than what's there at the moment.

"People are also happy that it's at the high-end of the market. There's not enough of that on the coast and that's probably where the growth is."

Friends of Bicheno Penguins were also supportive of the plans, believing the developers "have worked very diligently to ensure the best possible outcomes for the penguin colonies".

Ms Logie said the involvement of Dr Woehler gave the community confidence that the penguin colonies would be protected.

Jan Cameron - the founder of Kathmandu clothing company and former Bellamy's Australia director - bought the Silver Sands almost 20 years ago but has yet to progress a proposals past the development application stage.

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