Well, I took that to refer to the new residential construction going on in that area instead of a new goblin city (it's what those big jackhammers are for) - hence why there's attempts to kick the remaining residents of the Silver Bazaar out as they want to resume the land for new construction.. Also remember the new residential area the Goblet is located nearby within a mountain as well (or rather, on a mesa surrounded by mountains), so it's likely that's what that leve description is referring to.