A park with multi-use courts for older children and fitness equipment for adults is proposed for the development on the former Toyota site at Caringbah.
Last year, the new owner, Aliro, added a 3000 square metre park to plans to win support from Sutherland Shire Council for a Planning Proposal, which will be determined by the state government's planning department.
The Planning Proposal goes well beyond the present zoning to include much higher buildings, a pub, hotel-motel accommodation and large shopping area.
Council staff have been working with Aliro on a voluntary planning agreement.
A staff report said a children's playground next to the Woolooware Bay bike path was initially considered, but an all-abilities playground was being built at the nearby Sharks development and a second such facility would have little public benefit.
The report said the council's Open Space and Play Strategies highlighted the need to provide more services for older children and adults to play and be active.
"A service that is missing from council's portfolio is free outdoor multi use courts that allow for more 'urban' sports," the report said.
"Activities such as informal basketball are incredibly popular among young adults, yet difficult to accommodate in most parks because of noise disturbance to neighbours - particularly with night-time use.
"Aliro's preferred location for the open space is adjacent to Captain Cook Drive in the space between the main entrance to their site and Solander Fields."
The report said Aliro would provide $1.2 million and deliver the project within five years of gazettal of the Planning Proposal - "a pragmatic solution to deliver a quality public asset".