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Go Fast Hospitality Ltd has made an application for a new on-licence to sell alcohol from 8am to 2am at the Joe's Garage cafe and restaurant in Frederick St.
Various bars and nightclubs have previously operated at the site, including Two Beers, South Bar and Boogie Nights, but it has been closed since 2015.
The potential use of an alleyway leading to the back of the cafe from George St and concerns over noise levels have led to the application being opposed by neighbouring businesses Capers cafe, Romecco's Bakery, Alexia Motor Lodge and building owner David Linzmeyer.
Knox Church, which sits directly opposite the entrance to the alleyway, has also opposed the application.
The businesses say there has been a decrease in the amount of broken glass, urine and vomit left in the surrounding area since the last bar closed in 2015 but they fear the mess could return if a licence is granted.
There were no objections from the police, medical officer of health or licensing inspector.
A district licensing committee hearing will be held on Thursday to consider the application.
In a letter to the committee, Joe's Garage Dunedin owner Nick Nilsen, who also owns Lone Star Cafe and Bar in George St, said unlike previous businesses at the site his business was not a bar or nightclub and focused on a breakfast, lunch and dinner trade.
Mr Nilsen was unable to be contacted yesterday.
It was in his interest to keep the alleyway clean and tidy as it would be used to attract customers from George St, Mr Nilsen said in his letter.
Because the alleyway was used as a fire exit it was not possible for the entry gate to be locked but access through the alleyway would be restricted after 9pm to alleviate the concerns of the surrounding businesses, he said.
As the normal hours of the cafe would be 7am to 9pm and it would be open later only from time to time for private functions, noise was unlikely to be an issue, he said.