The Shelly Beach Residents Group and Guulagu Koala Custodians group are both leading the petition and say the land provides a narrow koala corridor with Sea Acres Rainforest.

Concerned residents say the Koala Plan of Management and its offset guidelines for tree replacement will not go far enough to protect habitat within the koala corridor.

The petition is in opposition to a development application to turn the site off Parklands Close and Wandella Avenue into a gated caravan park with 12 long-term sites.

The site was purchased by Jeff Crowe who submitted an eco-cabin proposal for the development of the site in 2017. There were objections to that proposal which prompted the formation of the Shelly Beach Residents Action Group.

Under the current DA being assessed by Port Macquarie-Hastings Council, the existing castle is proposed to be utilised as a café.

Read more: Koalas over caravans: residents launch petition

The petition to stop the development says the site is covered in tall trees and is also home migratory birds and other wildlife.

The petition says "there is a cultural responsibility to work actively for koala conservation".

Arlene Mehan is the spokesperson for the Guulagu Koala Custodians group which formed after the massive loss of koala population in the Black Summer bushfires.

Ms Mehan said it is a community responsibility to think critically about the long-term impacts of decision-making around the approval of new development across the local government area.

A Birpai woman whose totem is the koala, or guula in the Gathang language, is deeply concerned about koala population numbers and the loss of urban habitat.

"We need more of a voice and bring together our energy as a community," Ms Mehan said.

"Where the Fantasy Glades site sits is on a predominant koala songline. Traditional ecological knowledge proves the interruption of this habitat not only impacts the immediate population, but has repercussions for koalas on that the songline which extends into other areas.

"We need to take the custodianship of our land seriously."

Sara Phillips, a spokesperson for the petition, said it is unfortunate mature koala food trees and many of the koala browse trees, up to 11 species, will impacted if the development goes ahead.

A social impact statement prepared as a part of the application to develop the land says the proposal will not encroach on the Environmental Conservation zoned land.

The site is zoned R1 General Residential, E2 Environmental Conservation and RE2 Private Recreation under the provisions of Port Macquarie-Hastings LEP 2011.

The proposed design of the development is considered to be "capable of residents existing together in harmony" with the surrounding environment, the report says.

Ms Phillips believes the Biodiversity Development Assessment Report or Koala Plan of Management and does not adequately protect the large numbers of koalas living in the area.

"The Shelly Beach Residents Action Group calls on the mayor and the other councillors to follow the council's Koala Recovery Strategy and protect this core koala habitat that currently provides a safe haven for koalas from the three biggest threats: habitat loss/fragmentation, road accidents and dog attacks."

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