I don't think the neighborhood has/had any real control on it. If they did; most NYC area's wouldn't have pop up shops. Camping on public sidewalks is common. People mention this "want to keep good relations" like that matters. A lease is a lease. If Funko didn't want campers they'd just change the policy to being a lottery not FCFS. i am deeply curious how this turns out though. If they plan on not doing it at all I wish they'd just say it now so people don't adjust their arrival dates in anticipation of something not happening.
Sure legally your right but that doesn't mean people aren't respectful. I think good relations does matter and because I do I have made great friends. Sometimes people do things because it is the right thing to do, not because they have to.
Also wouldn't telling people be keeping good relations? So if they don't care about the neighbors why would they care about your travel plans?
I don't know where you live but where I live camping out on the sidewalks is not common
The lottery would have to give you your number in line or else people would still camp out.