Melbourne Racing Club is pressing ahead with plans for a $3.5 billion makeover of Sandown Racecourse in the city's south-east, which is a significant strategic urban regeneration project.

The racing club has filed proposals to the Greater Dandenong Council to rezone the historic racetrack, which is 25 kilometers from Melbourne's CBD, for residential usage.

The club has been pondering ideas to expand the facility since 2017, after publicly noting that the venue, which is popular with racers but not with the general public, burns a $5 million hole in its bank sheet each year.

The site's rezoning, if allowed, may allow the 112ha horse and motor-racing complex to be turned into a 7500-home masterplanned community.

The redevelopment would also include a new school, community center, and hospitality and entertainment venue near Princes Highway, as well as 12,000 square meters of retail space—including a full-service supermarket—and 8000 square meters of non-retail commercial use, which would result in the creation of up to 600 permanent jobs.

The club's plans include for a variety of housing typologies "to fulfill the demands of Melbourne's rising population" that "emphasis on liveability," taking advantage of the site's proximity to Sandown Park Railway Station.

Around 400 homes have been set aside as affordable accommodation for important professionals including teachers and emergency responders.

The Princes Highway runs north-east, Corrigan Road runs east, residential properties run south, the Pakenham-Cranbourne Railway line runs south-east, and residential properties and Warner Reserve run west of the aging racetrack.

The masterplanned complex will be separated into four stages, each of which will require a separate permission and will be completed during a 20-year construction period.

The town centre zone, which will be located to the south of the property between the heritage-listed grandstand and Sandown Park railway station, will have up to 12 story structures.

Buildings in the development's western and eastern precincts, as well as those in the development's northern precinct, called the Princes precinct owing to its location along Princes Highway, will reach six storeys.

The council has delegated the decision to planning minister Richard Wynne due to the project's scale. Before a decision is made, the proposals will be put on display and open to public comment through a ministerial planning permission.

The council will determine whether or not to continue with the planning scheme revision after receiving public comments.

An impartial ministerial advisory group will then assess the project's merits and recommend whether or not a permit should be issued.

If the plan is completely realized, at least 15% of the racetrack will be preserved as open space and "revitalized" to create a new corridor of parks, paths, exercise stations, playgrounds, and sports courts.

According to municipal planning director Jody Bosman, who spoke to the Dandenong council's latest bimonthly meeting on the development's complaints, roughly 7.9% of the land will be unfettered, with the remaining 7.1 percent aligned with Mile Creek and its banks.

"Matters such as the quantity of open space to be given would be available for public review and discussion if the proposed change receives ministerial approval and goes on public display," city planning director Jody Bosman said.

Despite considerable community resistance, the council issued a study that addressed density concerns, stating that the development would need the enlargement of Corrigan Road and an improvement of its junction with the Princes Highway to accommodate increasing traffic.

"It should be emphasized that obtaining ministerial approval does not imply council support for or opposition to the plan, but it does allow the formal amendment process to begin," according to the report.

The Melbourne Racing Club is now planning to consult industry participants, Melbourne Racing Club members, the community, and other stakeholders, in collaboration with Racing Victoria.

Melbourne Racing Club has enjoyed the consent of Racing Victoria in recent years to examine possibilities for the racetrack, as long as any future development revenues benefit the sport as a whole.

Sandown will continue to host horse and vehicle racing for the foreseeable future.