First, there was Occupy Wall Street. Then, there was Occupy Starbucks. Now, in the latest take on the protest franchise, a small group of dedicated demonstrators are camped on the central reservation of a highway in an upmarket suburb of Rio de Janeiro, the Olympic-city-in-waiting. Their goal: Occupy Golf.

After a 112-year hiatus, golf will return to the Games in Rio in 2016. But the city’s decision to build a new course on an Area of Environmental Protection has angered campaigners and raised questions about the authorities’ relationship with property developers.

Local people struggling with intermittent water supplies in the midst of a severe drought have also expressed irritation at the liberal use of sprinklers to keep the new course green.

Every day, 5m litres of water are pumped over the R$60m (£13.7m) course. The city authorities argue that the water does not come from the local utility company, but from aquifers under the ground. Ninety-five per cent of the water used is reabsorbed into the soil, according to the mayor’s office.

Not surprisingly, protesters demur. Sitting on a flimsy deckchair in the middle of the busy road through the neighbourhood of Barra da Tijuca, Carlos França, 55, a journalist and activist, said the Occupy Golf movement was not against the sport itself.

“We just don’t agree with the decision to build the course here,” he said.

Every now and then, a passing driver beeped in support – or else a passenger leaned out of a window to hurl abuse. A few days ago, França said, someone had lobbed a home-made explosive device into the protest camp. The remains of the deckchair it had destroyed lay under one of the banners.

Attempts to remove the protesters have failed. Since the group posted a video on its Facebook feed of an officer from the Municipal Guard punching a handcuffed demonstrator, the authorities have taken a more subtle approach.

“A few weeks ago they turned off the street lights in the area around our camp,” França said. “So it’s completely dark at night. Then in the early hours a few cars park either side of us, and two or three guys will get out and just stand there. They’re trying to intimidate us.”

In a controversial emergency session of the city council in late December 2012, the mayor of Rio, Eduardo Paes, won approval to site the course inside the Marapendi reserve, a protected part of Brazil’s Atlantic Forest. The reserve is home to various endangered flora and fauna, such as the Fluminense Swallowtail butterfly and the barredtail pearlfish.

Sonia Peixoto, a biologist who works for the town hall’s conservation unit, said the decision to build had been taken without proper consultation. “There was no technical study, no public meetings, no democratic process,” she said.

The mayor’s office said that no environmental impact assessment was required because the city council had approved the decision.

Other campaigners argue the location benefits property developers closely linked to Paes. On 12 February, a Rio de Janeiro state prosecutor opened an inquiry into alleged misconduct by the mayor’s office, following a report by the group, called Golfe Para Quem? (“Golf for whom?”), which claimed that developers stood to make an R$1bn in property sales after the Games.

The mayor’s office negotiated the use of the land with Pasquale Mauro, an 84-year-old billionaire property developer, whose claim to the area is disputed. In 2011, an inquiry by Rio’s state assembly labelled Mauro a grileiro, a term for someone who uses false documents to obtain property deeds.

Mauro claims ownership of large swaths of Barra da Tijuca, but he is cited in dozens of local lawsuits. In 2008, the ministry of labour discovered 70 workers living in “slave-like conditions” on one of his estates.

The local authorities point out that no public money has been used in the construction of the golf course. It is being financed by Fiori Empreendimentos, a company 70% controlled by Mauro, with the remaining shares owned by close family members.

Two women place a banner that says ‘support’ in front of green crosses they say represent the ‘death of nature,’ during a protest in late 2012. Photograph: Felipe Dana/AP

In return, the mayor’s office has waived planning restrictions in the areas surrounding the course, which had limited buildings to six storeys. RJZ Cyrela, a developer working in partnership with Mauro, now has permission to build 23 luxury condominiums, each 22 storeys high.

RJZ Cyrela did not respond to a request for information on the price of a condominium in the new Riserva Golf. However in 2006, Mauro struck a deal with the company to build Riserva Uno, another condominium in the area, where the starting price for an apartment is R$6m.

The property company was a major donor to Paes’ 2012 re-election campaign. Statistics from the city’s supreme electoral court show that RJZ Cyrela donated R$500,000 to his political party, of which 75% went to the mayor’s campaign.

“The golf course has to be seen in wider perspective,” Fernando Walcacer, a professor of environmental law at Rio’s PUC university, said. “Property developers have always had huge political influence in Rio. The developers have been looking at this space for years, and now the Olympics has given them their chance.”

Though the Olympics will be spread over across four separate zones, Barra da Tijuca, one of the wealthiest areas in Rio, will host the Olympic Park and the athletes’ village as well as the golf course. It will also receive the bulk of the public funds allocated for the Games.

Since 2012 Barra has received two new high-speed bus routes. By the time of the Olympics, it will have a third, plus a new metro station.

Orlando Santos Jr, a professor of urban planning at Rio’s federal university, said the city’s poorer northern zone would see few benefits from the Games.

“Concentrating the event in Barra da Tijuca legitimises public investment in infrastructure and mass transportation in the area,” he said.