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Ironic Cafe and Bar owner Steve Wilson said his business was losing $5000 a week because of cycleway work in Anzac Ave.
Contractors had closed the south-bound lane of the street, between Castle and St Andrew St, but kept the northbound lane open while building the separated cycleway.
The construction work began in July and was expected to continue until November.
Mr Wilson said contractors at first installed a "road closed" sign at the northern end of the work site, which he believed convinced many people the street’s businesses were also closed.
After Mr Wilson complained, the sign was replaced by one advising the businesses were still open, but customers were still staying away, he said.
When the ODT visited at 11am yesterday, the cafe - judged New Zealand’s best in 2014 - was empty.
Mr Wilson said he contacted the council to ask if would consider rates relief, or some other form of compensation, to offset the losses, but the request was rebuffed.
He was not against cycleways, or the contractors working outside his business, but believed the council should do more to help.
"This is our main business and it’s going to go on for a long time.
"We’ve spoken to the council about it, but they’re not interested in any way, shape or form of any compensation, at all.
"We’ve really noticed it and so have our suppliers, who are saying we’re not buying as much."
Dunedin City Council transport group manager Richard Saunders acknowledged the impact road works could have on businesses, but said the council did not offer rates relief to compensate for such disruption.
"We always try to minimise disruption and have worked with Mr Wilson to implement clearer signage and to keep as much parking available as possible during the work.
"Unfortunately, changes need to be made to road reserves within the city from time to time.
"This work has been confirmed through the appropriate planning processes and while the aim is to ensure disruption is kept to a minimum, the nature of the work does often mean some inconvenience."
The council would continue to try to minimise the disruption, but was "not in a position to provide financial assistance by way of rates exemptions or any other measure in situations such as this", he said.