Tauranga City Council's elected members will decide next Tuesday whether to approve an additional $1.27 million this financial year for the Durham St and Durham Lane upgrade.
An additional $2.01m for next financial year (2019/20) is being sought through the Annual Plan process.
Council staff yesterday told the Finance, Audit and Risk Committee the project needed additional funds due to timeframes and construction challenges, including a lack of knowledge of sub-surface conditions and of some services, and the absence of a contingency plan to address these unforeseen challenges.
The committee recommended the council approve the overspend so the new spaces could be delivered to the community.
In February 2017, the City Transformation Committee had decided which projects in the City Centre Spatial Framework should be constructed first.
With the construction of the new University of Waikato, the Durham St and Durham Lane upgrade were defined as a priority.
Once Durham St is complete, it will set the standard for other city centre street upgrades including Wharf St and Elizabeth St.
The council said in a press release today that the upgrade of Durham St delivers on council objectives "including improving the look and feel of the city centre, prioritising people and activity within the city centre and improving the resilience and quality of our infrastructure".