A new public consultation is under way on plans which could see the O2 Centre in Finchley Road flattened and 2,000 homes built.
Landsec, which owns the centre and the land it sits on, revealed plans to build 1,000 homes on its car park in 2019.
Now, it is developing an expanded "masterplan", which could see 2,000 homes, a tree-lined "linear park" and a "new town square" appear.
Residents have raised concerns about the loss of the O2 Centre and its car park, and the height of proposed residential buildings.
John Saynor, of West Hampstead Amenity and Transport (WHAT), said Sainsbury's should be retained, and was concerned the scheme could involve high-rise housing.
He said environmental improvements like "more open spaces, fewer cars, trees and general sustainability" would be welcome, but said he was concerned plans would lack affordable housing.
On the consultation site Landsec says these are "exciting ideas about a comprehensive transformation of the area".
View and respond to the consultation at O2vision.commonplace.is
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