Hamilton Central Business Association general manager Sandy Turner says the project to makeover Riff Raff Square isn't intended to make it a "streetie-friendly hang-out space".
Ms Turner said the plan was to enhance what is now an "ugly, dilapidated part of the city".
Embassy Park, as it's officially known, is a common meeting ground for Hamilton's vagrant population.
Mayor Julie Hardaker and councillors hosted a barbecue in the square earlier this month to include the streeties in the planning process. The project aims to build on the Rocky Horror theme.
"As far as including members of the community considered 'streeties' in the project, I don't have an issue with that," said Ms Turner. "As far as making it a streeties area, I absolutely disagree with that. That's not what the project was about.
"It's about enhancing the space. Let's make it a tourist attraction. Let's get rid of those disgusting toilets. We need to provide some decent public toilets. It's never been the intention of the [planning] group to make it a 'streetie-friendly' hang-out space."
Ms Turner hopes to see Riff Raff Square become more of a tourist attraction, with provision for tourist buses to park.
"If we create a space that attracts lots of people it won't be comfortable for the streeties because they don't want to be around bunches of people, tourists coming and going, buses stopping, people getting out and getting their photo taken with the statue.
"Suddenly we have an active, busy space and a place we can all be proud of."
The planning group, comprising business people, architects, and other interested parties, will meet next month to consider ideas for the redevelopment.