Port Phillip council is considering the proposal by Arc Events, which wants to host weddings, corporate functions and community events on the Plummer Street property, but also intend to stage several music festivals each year for up to 7500 patrons.

Police have objected to the scale of the proposed venue and the potential impact on local officers and emergency services.

There are also concerns about the lack of public transport and noise issues in an area earmarked for residential development.

A senior police source warned the planning application could be a "Trojan horse for a dance venue or a big club" following problems at the same property in December last year.

The property in Plummer Street in Port Melbourne.

More than 1500 revellers were left stranded last New Year's Eve after liquor licensing authorities shut down an illegal dance party held by promotions company Evolutions Events, which has no association with Arc Events.

Arc Events director Adam McKenzie insists the project would not damage residential amenity and claims it has "overwhelming support" from the council.

"We're not about making a quick buck. We want to work with the community and tick all the boxes," he said.

"It's a multi-faceted community events space that can lend itself to some really awesome things for the community."

He said a liquor-licence application had been lodged with the Victorian Commission for Liquor and Gambling Regulation for about 4000 patrons at some events, which would make it one of the largest licensed premises in the state.

The venue would be licensed from 7am until 1am daily.

According to figures obtained from Port Phillip Council, the proposal includes: 

• Café: Up to 266 patrons
• Bar: Up to 1363 patrons
• Functions including weddings: Up to 2170 guests
• Community events: Up to 4715 people
• Day festivals (maximum six per year): Up to 7560 patrons

Mr McKenzie blamed competitors for spreading misinformation, which he said had created "hysteria" about the project.

He said local police had not been receptive to his attempts to iron out misunderstandings about the venue.

"I've made a few calls to the local police station and they basically told me to get lost," he said.

Mr McKenzie, 27, and his business partners, Josh Paneth, 27, and twin brothers Asher and Gideon Luber, 25, are facing other planning problems after Melbourne City Council recently refused them a permit to host a separate music festival at the Docklands.

Hundreds of tickets have been sold and international DJs from France, Germany and Brazil are scheduled to play at the event known as 'The Petting Zoo' on December 17.

According to promotional website, the "series of immersive day festivals" were due to be staged in "a mix of undercover, open air and grassed spaces".

However, a spokesman from Melbourne City Council confirmed the application "did not meet a number of minimum requirements".

With less than two weeks until the event, Mr McKenzie conceded the festival would probably be relocated to a licensed venue and those who had already purchased tickets could have grounds for a partial refund.