The move has brought the plan one step closer, albeit in a reduced form, Dunedin city councillor Colin Weatherall said yesterday.
Cr Weatherall announced the council had withdrawn its notices of requirement for a Fairley St walkway as part of its plans for the area.
The harbourside plan change has been grinding slowly through an Environment Court process for more than a year.
The issue began in 2005, when the council initiated a district plan change allowing the harbourside to be redeveloped with apartments, tree-lined boulevards, bars and cafes.
It also included pathways through the harbourside industrial area that would have cut through buildings in their path, with the council to compulsorily acquire the buildings and land under the Public Works Act.
The proposal, described as a "50-year vision", was developed by the council and Port Otago's property investment subsidiary, Chalmers Properties Ltd, which owns much of the land.
The change of zoning was to have provided a platform for developers to move in and invest in the area.
The plan received heavy criticism from industry, with many businesses saying the proposal could seriously compromise their operations, as those new activities could not successfully co-exist with the industry already established through the area.
In February last year, a hearings panel confirmed the plan change, including two notices of requirement to designate areas for a walkway on Fairley St.
In early March, then councillor and now Mayor Dave Cull came out against the plan.
In April, the council and a group of 20 businesses announced they had come to an agreement on the issue, with the council agreeing to dump much of stage 2 from the two-stage plan, and businesses agreeing to accept stage 1, subject to further negotiation.
Yesterday, Cr Weatherall said the decision to withdraw the Fairley St walkway designation was made at a council meeting on December 13, to assist with the negotiations.
He said the council was still looking at ways to provide better access from the city to the harbour.
Options included a new "pedestrian friendly" connection between the railway station foot-bridge and the Steamer Basin using a boulevard alongside Thomas Burns St.
Pedestrian and cycle access across the road and rail barrier at the bottom of Rattray St was also being considered.
Most aspects of the mediation had been resolved, though Chalmers Properties' plans for the Fryatt St wharf buildings had not, and concept plans had been asked for.
"We need to finalise details on that," Cr Weatherall said.
Developer Tim Barnett's plan for a three-storeyed office and residential building by the Steamer Basin also had to be resolved.
Asked what was left of the vision, considering the aspects that had been dropped, Cr Weatherall said it was "a very functional plan change that works for Dunedin", that would include some residential and recreational activities, and keep industry "alive and working" in the area.
