"I think when the excavators arrive and we can put images up at the site people are going to see what is touted and get very excited," says Dale Bainbridge, the owner of the future hotel that will rise at the former Thomas Jewellers building.

But how has the Mall come to dominate people's idea of what the town is in the first place?

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40 years ago, Bendigo's council and its consultants were preparing to shut off traffic to help businesses concerned about the emergence of outer suburb shopping centres.

The council spent much of 1981 publicly releasing documents, debating finer points and preparing for works to begin. The mall was completed in 1982.

Bendigo was not the only place malls were changing city centres, La Trobe University community planning expert Melissa Kennedy said.

"Ballarat had also done one by that time. Cities felt the need to find a focal point for their identity," she said.

"They also wanted to have a kind of civic heart that solved problems around people moving out into the suburbs."

Shutting cars out of the Mall appears to have been widely popular with the public in the 1970s - which may come as a surprise to modern residents accustomed to heated debates about city centre's parking issues.

Nearly 70 per cent of people surveyed in 1979 said a pedestrian mall was a good idea, council documents from the period show.

Below: the old Mall, in pictures:

Some members of the public blame the redesign for keeping shoppers away, though history would suggest that city centre retail was always going to struggle as multiple major shopping areas rose in rapidly growing outer suburbs.

"You've got to look at that broader context about how retail has changed since the 1980s and the rise of online shopping," Dr Kennedy said.

"I hold one of those controversial opinions that the (remodelled) Mall is a place of possibilities. It's got some great design elements and a lot of trees have now matured."

Dr Kennedy said the future hotel would speak to some of those possibilities. So would the outdoor dining options that will come with the hotel's public restaurant and cafe.

"We are in this transition now. I have students who are looking at that element of the Mall, and asking if there are more ways to invite different groups of people in," Dr Kennedy said.

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Those students are expected to soon publicly release their findings as part of La Trobe's CityStudios course. Their ideas will likely have a receptive audience at the future hotel.

Mr Bainbridge believed that monthly events, tourist accommodation and multiple restaurants will help attract modern day crowds just as retailers did in the 1980s.

He acknowledged people might not be quite convinced yet, since it was easy for developers to win council planning approvals and never start building.

That was not the case here though, Mr Bainbridge said.

In fact, shoppers would soon see physical signs that work is looming at the Mall's site.

Mr Bainbridge said there were clear signs the council wanted to build on the momentum the hotel could bring.

"It's very rare that you regularly have councillors ringing up for updates because they are so excited about a project," he said.

This story is part of a regular Bendigo Weekly history series called What Happened? Special thanks to the Bendigo Regional Archives Centre for help sourcing historical documents, and particularly to Desiree Pettit-Keating.