Areas were fenced off last week to allow Wollongong City Council to continue work on the Blue Mile project and will remain there for about five months while new picnic furniture, lighting and landscaping is installed.

When barriers were first erected last year, blocking off sand and water, residents dubbed it the "Great Wall of Wollongong".

Frank Demertzi, owner of Levendi cafe, said customer numbers had dropped dramatically since the fence reappeared.

"It's killed business - the fence scares people away," he said.

"Custom is down anything between 40 and 60 per cent.

"Where I had the impulse buyers walking by the front of the shop, now they're on the boardwalk.

"I don't see the logic of starting it in the school holiday period. It's very frustrating."

Director of works and infrastructure Peter Kofod said the $500,000 project would enhance Blue Mile works already completed.

"The construction site will be limited to the western side of Brighton Lawn to minimise disruption to the community," he said.