Once the site is improved, the ACT will apply for another works approval to extend the pop-up village in West Basin beyond September this year when the current two-year approval expires.

Deputy-director general of the chief minister's directorate Ben Ponton said the government had lodged a works application for a storage compound, so back-of-house services were not visible, a fence in front of the toilet blocks, and an artwork on the northern end of the vertical structure, created during the Art Not Apart festival.

"These works are necessary to improve the site presentation of Westside," he said. "The ACT Government intends to submit a works approval application ... to extend the term of Westside beyond 12 September 2016. This application will be prepared when site improvements are complete."

It is not clear what happens next, with the authority previously expecting the full works application by the end of April so it could be processed before September, including public submissions.

The National Capital Authority said in a statement that the ACT had agreed to provide the "a strategic long-term place management strategy" for the site, and "any assessment on works approval applications will be made in the context of this long-term strategy".

"The NCA has expressed an expectation for improvements to be made in relation to the presentation and management of the site in order for an extension to be granted, subject to the community's feedback once public consultation commences," the authority said.

The government spent more than $1 million building the container village, initially announcing it as a pop-up that would be ready for Floriade in September 2014. But delays saw construction continue well into 2015, and in August 2015 the government took back control of the village from Stromlo Stomping Grounds, which had been beset by complaints from sub-contractors about not being paid.

Tenants have struggled with lack of patronage at the site, and only recently signed rental agreements with the ACT government.

Meanwhile, negotiations are continuing on the precise footprint for Floriade this year, despite planting and landscaping already beginning in some of Commonwealth Park. The authority wants a substantially smaller footprint for Floriade in the park, concerned about its impact on mature trees – which have been damaged or killed by the flower festival construction work – and by the way Commonwealth Park is taken over for much of every year by construction and deconstruction of Floriade.