QLDC capital works manager Ken Gousmett told the committee work was due to begin next week around the Rees-Beach Sts intersection, prompted by Skyline's development opposite the Mountaineer building.
Skyline gained resource consent for the development in 2004.
At that time, it was intended buildings would be raised to the Lake Wakatipu flood level, and streets would be raised to match them.
The condition was "hit and miss" because it depended on when buildings were overhauled and rebuilt.
The company had built its development under its consent, meaning the finished product was 400mm higher than the footpath, Mr Gousmett said.
"There were no conditions [for Skyline] about changing or matching street level.
"Any change of level would have to be achieved by the council and that's the process we're in."Mr Gousmett said the council's estimate for its share of the work was $51,000 - Skyline had estimated the council's share would be $91,000.
The council had a budget of $95,000 for the work, he said.
"The council is only paying for direct improvements, not works that are needed as a result of that building's floor being higher than the street.
"Skyline have agreed to it in principle. We just have some items we have to agree on.
"They are the managers of the project. It's their project being carried out on council road reserve.
"This is not a council job. Council are not running it. It's not part of council's planned works. This is a private organisation carrying out works," Mr Gousmett said.
The company's plan - to raise the footpath around its frontage by 300-400mm; and insert a concrete kerb and safety barrier that separated pedestrians from traffic - was "not favourable".
"Council's [plan] is that it becomes more of a pedestrian [area] than it is now."
Mr Gousmett said work included establishing a "consistent crossfall" on the road and footpath, leading to the kerb and channel on the other side of the roads.
The work would be confined to the Skyline building's frontage.
"It's better for Skyline; it's better for the street pedestrians; it's better for other shops. It's going to give a better visual and less hazardous area.
"It's seen as a win-win situation, but the timing is not particularly favourable.
"We had a very strong message from retailers . . . saying they want it now; it's better than leaving it until later."
Work would be carried out by the contractor, Fulton Hogan, is expected to begin on Tuesday and "has to be finished" by December 15.
