Portsmouth City Council's planning committee will be asked to grant permission for the £55m PJ Livesey scheme next week.
'The proposal is considered to be a sustainable development of an allocated site within a predominantly residential area, contributing positively to the city's housing need,' the report says. 'It would secure and safeguard the future of this significant listed building and its setting and result in a net increase in publicly accessible open space.
'It would also provide sufficient mitigation to alleviate the potential negative impact on traffic and ecology.'
The application, submitted in February 2020, proposes the construction of 209 homes, none of which would be affordable, on the Milton site.
It has attracted 229 letters of objection, including representations from council leader Gerald Vernon-Jackson and cabinet member for housing Darren Sanders opposed to the proposals.
'The lack of affordable housing in this application is not acceptable,' Cllr Sanders said. 'We know we need more affordable homes in Portsmouth to provide places that local people can afford to live. St James' should be a site that provides some of that.'
Milton ward councillor Kimberly Barrett, who is also the council's cabinet member for climate change, said the views of people living in the area 'need to be listened to'.
She added: ‘Thousands have signed petitions against this type of development at St James, 229 people have directly written to the council to object to the scheme. Residents have spoken and they must be listened to.’
Rod Bailey, the chairman of Milton Neighbourhood Planning Forum, said the proposals went 'completely against' the recently-submitted neighbourhood plan for the area.
'St James' Hospital cannot take 209 new homes,' he said. 'The quantity of houses is just too much and there is no provision for community activity, no new community infrastructure, and a big loss of public green space. It goes completely against the recently submitted Milton Neighbourhood Plan'
Janice Burkinshaw, the chairwoman of Milton Neighbourhood Forum said roads in the area 'cannot cope' with the extra traffic the development would create.
'We have done our own traffic counts as well as paying for an independent traffic analysis which shows that there are already junctions which can't take the cars, not to mention the air pollution,’ she said.
Concerns have also been raised about the loss of green areas through the development and about the impact on the listed hospital and chapel buildings.
Steve Pitt, the chairman of St James' Memorial Park Trust, said: ‘The hospital and chapel are listed buildings. The setting of those listed buildings and the history they represent should be respected. The design of the housing being put forward is just wrong in this context. We also need to know that the listed chapel building has a sustainable future.’
Keep Milton Green Campaigner Martin Lock said: ‘The loss of green space and protected trees in this application is completely unacceptable. At a time when the need for green space is more evident than ever, this cannot go through. St James' provides a green lung for this part of the city that must stay, especially given the wildlife habitats it supports. We need canopy cover, not to have trees knocked down.’
However, Historic England said the scheme would bring 'considerable' benefits through their conservation.
Should the project go ahead, the existing main hospital and mortuary would be converted into 151 homes, ranging from one-bed flats to four-bed houses, alongside 58 new builds.
The cricket pitch and pavilion would be kept and given on a long lease to the club.
The scheme has been supported by Portsmouth NHS Clinical Commissioning Group (CCG) which will sell the site to the developer should permission be granted.
'The Grade II-listed buildings at St James' Hospital are not suitable for the delivery of modern mental health services and the main block was mostly administrative with significant vacant and underutilised space,' it said.
The planning committee will meet on Wednesday, January 12.
It had been due to determine the application alongside a separate Homes England scheme for 107 homes next to the site but said 'design amendments' were still being made to that scheme.
PJ Livesey Group land director, James Woodmansee, said: ‘This is a comprehensive and thorough planning application and we thank the officers and all the different expert bodies involved for getting to this point.
“We believe our plans will create iconic new housing for Portsmouth within the beautiful listed buildings, provide the range of new homes the city needs and open up this site with more than 9,000sq m of open recreational space for all to enjoy.
‘After more than two years of consultations and reports we hope the planning committee will agree with their officers and approve progress for this site which currently continues to be a drain on vital NHS cash resources.’