A declaration was made at 3.35am after the man, who is believed to be in a residential property, stated he had weapons and would use them on others.
Police were notified and immediately attended the scene, establishing a cordon of the area.
It is unknown if anyone else is inside the residence with the man.
“The PSPA declaration for Alice Street encompasses the area surrounding Alice Street to Adelaide Lane and boundaries of Bazaar Street, Anne Street and Lennox Street,” police said.
“Residents within the cordon are advised to stay indoors and members of the public are advised to avoid the area.”
Specialist police and negotiators are on scene.