ASM policy building suggestion for dev environment

"I realize automatic mode will set to blocking mode by default and I need to manually change to transparent mode"

You can start with the automatic learning process while in Transparent mode. I'd start with prod, and then move to dev. If you do not know exactly what you want to block with ASM, for your very first implementation I recommend evaluating Manual Traffic Learning section over a period of one week. Some knowledge about the protected application could do no harm. You may want to collaborate with application specialists to gain better results.