Tauranga City Council has approved a further $60,000 in funding for the CBD container village Our Place, with one councillor calling it "a bailout".
The downtown retail and eatery precinct has already received $357,824.78 of ratepayer money.
Our Place's request for more council funding was approved by six votes to five at a council meeting yesterday afternoon.
Our Place will report back to the council in April.
Some of the council discussion around the extra funding took place behind closed doors, but the final vote and supporting statements by councillors were moved into the public arena at the request of some of the elected members.
Councillor Larry Baldock, one of those who supported the extra funding, said he had been hearing how much people love the place.
He said the project was activating and transforming the city centre at a time of turmoil and destabilisation.
"This is what we want. This is what the retailers have been asking us to provide."
Baldock acknowledged that Our Place was a "very ambitious project".
He said there were huge unknowns going into it as well as unforeseen costs, and issues around consenting meant lengthy delays and a loss of tenants.
Those issues were also mentioned by other councillors, who noted that it was the council who approached the owners of Our Place about the idea, and not the other way around.
Councillor Leanne Brown said the council needed to own its part in the project.
She also said $1.09 per ratepayer "isn't going to break the bank".
The concerns of struggling businesses in the CBD were noted by councillors who voted both for and against the extra funding.
Multiple councillors also commended the work of Our Place owners Christopher and Rachelle Duffy, who run Little Big Events.
Tauranga Mayor Greg Brownless and four councillors disagreed with the extra funding.
Steve Morris said it was other peoples' money being spent.
He said Our Place was not a charitable trust and did not believe it met the threshold of being a social entity.
Morris said in his opinion the council should not socialise the risks associated with the venture by offering "a bailout".
John Robson said he was uncomfortable with the extra funding, if only because $60,000 was a "nickel-and-dime" top up that wouldn't be enough to ensure Our Place's success.
He said the initial council decision to support the project had not been properly thought through.
"The position we find ourselves in is due to a lack of commercial discipline."
Brownless said while Our Place was going well, he was not a person who spent ratepayers' money on other businesses.
He said he had learned a lesson for the future to "keep right out of these things".
The council heard other entities and businesses were considering making contributions towards the project, and those contributions may be at risk if the council did not provide some funding.
Councillors had previously agreed to extend Our Place's lease to June 2020.
For: Larry Baldock, Kelvin Clout, Leanne Brown, Terry Molloy, Bill Grainger, Max Mason.
Against: Greg Brownless, Rick Curach, John Robson, Steve Morris, Catherine Stewart.
•$526,000 budgeted for the 91 Willow St site in the Tauranga City Council's Long Term Plan 2015-25 Amendment.
•The council has already spent $340,000 of that to establish the site for Our Place.
•The council's events department has also provided Our Place with $17,824.78 in funding for four different events. That money is not part of the $526,000 budgeted for the site.
•The $60,000 of extra funding approved on Tuesday is part of the $526,000 budget.