A Bendigo businessman purchased Backhaus Arcade from the Backhaus Estate in a multi-million dollar deal in December last year, and will take ownership in August.

He has submitted plans to the City of Greater Bendigo to extend a shopfront across the pedestrian walkway at the Mitchell Street end, causing the arcade to effectively end at an existing comic book store with access from Lyttleton Terrace.

But he says pedestrians will still be able to pass through the shops to gain access to Mitchell Street using a “walk through tenancy”.

In a letter to council, the building owner said he wanted to modernise the area to ensure businesses could continue to survive.

“This site has the potential to become another Killians Walk with mass vacancies and ongoing antisocial behaviour unless changes to modernise its layout occur,” he said.

“The changes will make the area a much safer and more appealing place for visitors to Bendigo.”

All six shops in the arcade are occupied.

The building owner told the Bendigo Advertiser that the arcade needed to match the “vibrancy” of the neighbouring successful Lyttleton Terrace precinct.

He described the plans as a “modest extension”.

“We need to make sure we keep evolving,” he said.

“The old days of Killians Walk and Hargreaves Mall are behind us.

“I’m still trying to keep the walk-through in the arcade so we can keep the flow of pedestrian traffic.

“The arcade has so many great options.”

He also plans to give the circa-1980s Backhaus Arcade an interior makeover to bring its appearance into the 21st century.

It was the second time Backhaus Estate property has been sold in recent years, along with the sale property on Williamson Street.

It signals a change in direction for the Catholic Diocese of Sandhurst, which has resisted selling any Backhaus land for more than 130 years.

The land was left to the diocese late in the 19th century following the death of Dr Henry Backhaus, the first Catholic priest on the Bendigo goldfields. His bequests helped fund the Sacred Heart Cathedral.

In 2009, the church faced backlash from parishioners when it attempted to sell land in Axedale, Fosterville and Runnymede. The land consisted of 32 farmlets and broadacre parcels.

The Backhaus Estate property portfolio is managed by the Sandhurst Trustees, which did not respond to a request for comment.