The man, who appears to be in his 20s, was arrested by Dunedin police yesterday on an outstanding warrant, after reports he had "verbally abused" a member of the public who warned an elderly woman against giving him money.
A retailer in the area, who did not want to be named for fear of retribution, said the man had been in the lane, which runs between George St and Gt King St, almost every day for the past two weeks, and occasionally in previous months. He held a sign saying he was homeless and needed help.
Yesterday morning, a customer entered the retailer's store upset after being verbally abused by the man. He had allegedly yelled obscenities at the woman after she said he was not homeless.
The retailer said the man held a sign saying he was homeless, and sat looking dejected against a wall in the lane. He appeared to prey on elderly people who felt sorry for him, the retailer added.
He also got "really drunk", and would become a nuisance.
"It is really intimidating for young schoolgirls and for tourists, everyone really who is walking through that lane," the retailer said.
Dunedin Night Shelter Trust chairman Kevin Tansley said he had not heard of, or seen, the man in question, but sometimes people chose to be homeless and did not want to use the shelter's services.
There were homeless people in Dunedin, but it was unusual to find them begging on the street, Mr Tansley said.
Shelter staff did not look for homeless people because most knew where the shelter was and the services it provided.
It was likely the man was passing through town and was trying to get sympathy, he said.
Sergeant Tania Baron, of Dunedin, said police could not arrest the man for sitting and holding a sign, but if he was causing a nuisance or harassing the public he would be spoken to.
The man was released on bail yesterday and there were reports he was back in Albion Pl yesterday afternoon.
