The ambitious project would create two hotels, a 10-pin bowling centre, five cinema screens, winter garden and an aquarium.
The proposed site is The Island, owned by Paul Taylor, and it is hoped the scheme could also create 450 new jobs.
But residents live at De Vere Gardens were cool on the plans, fearing they cold spoil the area.
Gerald Joplin, 70, who lives with his wife Jan in the apartment block, said: "I have not had a chance to study the plans in detail but I'm not very happy about a seven storey hotel.
"I think the whole thing needs looking at with a lot of discussion with the residents of St Annes."
Mrs Joplin, 63, said she would prefer a low rise development and added: "St Annes buildings are quite old fashioned and that's too modern."
Hyman Annis, 88, lives with his wife Minnie, 82, in the apartments. He said; "This will never be a Blackpool."
His wife said: "I understand we have to regenerate and be more modern. Make it so it fits in with the lovely, beautiful outlook."
Paul Taylor said: "This is a major attraction for St Annes which will bring people in. This is the start of what we need to get St Annes moving forward.
"It could be ready for the 2012 Open when the eyes of the world will be on us and will be a once in a lifetime opportunity for people to see what St Annes is about."