There's a simple solution to all of this: Build a parking garage above the town square. Everything at ground level would stay exactly as it is now with streets and free nightly entertainment. The first level of parking would be high enough so as not to obscure the view of all the restaurants and shops. This would cover an area that includes the streets.
It just has to be engineered with steel beams that are strong enough to hold all the weight.
It would be an engineering marvel.
