CAPE TOWN, South Africa—U.S. retail behemoth Amazon.com Inc. is once again embroiled in politically charged controversy as it tries to establish another regional headquarters—this time in Cape Town, South Africa.

More than two years after the company abandoned plans for a $2.5 billion New York City headquarters amid political opposition, this fight is over land and a river that some South African indigenous groups say are sacred and should be declared a World Heritage site. The project plan for the nearly $350 million mixed-use...

CAPE TOWN, South Africa—U.S. retail behemoth Amazon.com Inc. is once again embroiled in politically charged controversy as it tries to establish another regional headquarters—this time in Cape Town, South Africa.

More than two years after the company abandoned plans for a $2.5 billion New York City headquarters amid political opposition, this fight is over land and a river that some South African indigenous groups say are sacred and should be declared a World Heritage site. The project plan for the nearly $350 million mixed-use development, dubbed The River Club—where Amazon is slated to be the anchor tenant—includes office space, housing, running and cycling tracks and some 20 acres of green-park space open to the public. For over two decades, the space had been a members-only club with a 9-hole golf course in the shadow of the city’s iconic Table Mountain. It’s now a building site.

Amazon, which already has offices in Cape Town’s city center, is expected to use the new base of operations as a beachhead to grow its presence on a continent where poor infrastructure, constrained logistics and low but growing penetration of smartphones have delayed the arrival of online delivery services. Yet the controversy surrounding the River Club redevelopment has once again put the company in a defensive position. Amazon declined to comment, referring all questions to the developer.

Computer generated images of the proposed Amazon development in Cape Town, South Africa.

The developer and the City of Cape Town, the local administration, say the development will make what was previously private land into publicly accessible green space and will bring much-needed jobs and investment to the city.

Images this month of a sprawling new Amazon depot constructed next to slum housing in Tijuana, Mexico, drew criticism that the $1.8 trillion company’s vast new developments are symbols of rising inequality.

In opposition to the South African development are some Khoi and San—herders and hunters indigenous to Southern Africa—heritage groups and local civic associations. Their objections to the development range from allegations of irregularities in the rezoning process to concerns about its environmental impact to complaints about inadequate consideration of the site’s intangible heritage. The site was the approximate location of a battle between a group of Khoi and the Portuguese in 1510, before the Dutch East India Company set up its trading outpost in what is now Cape Town. The developer rejects the objectors’ claims and says the City and provincial governments “found no irregularities.”

Tauriq Jenkins, high commissioner of an indigenous group that opposes the redevelopment of the River Club in Cape Town for Amazon’s regional base.

“Part of what we want is a World Heritage site that commemorates that battle,” said Tauriq Jenkins, the high commissioner for the Goringhaicona Khoi-Khoin Indigenous Traditional Council, which opposes the development. He added that the site was one of the first places where Roman-Dutch law was applied to parcel out land to settlers, making it culturally charged. “This is where the colonial bomb hit,” he said.

A coalition of Khoi and San leaders that call themselves the Western Cape First Nations Collective Trust supports the development, which includes a cultural, heritage and media center to educate the public about the Khoi and San’s history.

South Africa’s need for investment is particularly acute post-pandemic. The River Club redevelopment is expected to bring about 6,000 permanent direct jobs and nearly 14,000 indirect jobs during the construction phase to Cape Town at a fraught moment for the economy: A record economic contraction of 6.4% last year has pushed the unemployment rate to a record 43%.

Jody Aufrichtig, trustee and spokesman for the Liesbeek Leisure Properties Trust, which owns and is developing the site, also rehabilitated Cape Town’s Old Biscuit Mill from a dilapidated drug den into a mixed-use development with offices, boutiques, restaurants and popular Saturday market. He says he has consulted extensively with various groups of Khoi and San, and that the developer has spent millions of rand adjusting the site plan to meet their requests.

“It’s been a long, hard, expensive process” that included 276 different versions of the site development plan, Mr. Aufrichtig said. “[The First Nations Collective Trust] were hard and tough negotiators. They stood their ground. But always with respect.”

The City of Cape Town also supports the development.

The Liesbeek River outside The River Club in Cape Town on Sept. 17.

“[The development] will transform the property from an isolated site with minimal foot traffic to a publicly accessible precinct,” said Dan Plato, executive mayor of Cape Town.

“Cape Town’s ability to attract and host employers and wealth-generators of Amazon’s caliber not only leads to direct employment and economic opportunities, but also improves the city’s profile as a destination for international investment,” Mr. Plato said.

At the same time, objectors ask why Amazon has chosen to establish its headquarters on this specific site and have expressed concern over the company’s lack of response to their complaints.

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“There are other sites that are empty because of Covid,” said Leslie London, chairperson of the Observatory Civic Association, a neighborhood group that opposes the development. “We feel that the whole process has been set up to ensure the development got the go ahead.”

After the project was approved by the City of Cape Town and the provincial government, the Observatory Civic Association and the Goringhaicona Khoi-Khoin Indigenous Traditional Council made an application to the provincial High Court to halt the project. For the moment though, construction is continuing.

Jody Aufrichtig, spokesman for the Liesbeek Leisure Properties Trust at the River Club construction site on Sept. 17.

“Where valid concerns were raised, those were outweighed by the benefits,” Mr. Plato said. “The City believes that the legal challenge lacks merit and is brought simply to cause delay.”

Mr. Jenkins is adamant that the Goringhaicona council he leads and other Khoi and San groups will take the matter all the way to South Africa’s Constitutional Court, if necessary.

“Would Jeff Bezos go into a Native American territory and decide to completely devastate its most sacred terrain to put up an Amazon headquarters?” Mr. Jenkins said. “It makes a Disneyland of our heritage.”

Construction work on the River Club site on Sept. 17.

Write to Alexandra Wexler at alexandra.wexler@wsj.com