Blocking part of a Zone Graph in the City Sample

I am trying to develop an architectural space within in a city for a school project. I am using the Small City sample level as a background and have opened up a free space by deleting several buildings. However, I am not able to delete part of the zone graph, so I have humans walking through empty space when I click play. (I think it is editable in Houdini, but I had trouble exporting my own made city as I am using the free version of Houdini.) I was wondering if there is a way possible to override the zone graph in a particular space to block out the people and cars.

So I realised that by just placing a large box around the area and changing the Collision Presets should solve the issue. However, setting Collision in the StaticMesh settings for the pawn to “Ignore”, blocks out my character as well as the AI people. How can I allow my character to walk in and block the others out?