The council’s general manager of city strategy Natalie Reiter said the Woodmans Hill property did not form part of the sale of the Rivers’ store chain in December and had been retained by former owner Philip Goodman.

Ms Reiter said the council worked with Mr Goodman and determined to replace the warehouse sheds with extra tourist accommodation cabins.

“As you drive into Ballarat from Melbourne, instead of seeing large warehouses it’ll just be tourism accommodation cabins,” she said.

“We consider it a positive outcome.”

Councillor Vicki Coltman said the issue of Ballarat’s eastern entrance been long-running, but with the sale of Rivers the council had more clarification of what the area would be used for in the future.

Councillor Amy Johnson said it was disappointing, after the considerable effort the council put into preparing for the development, but she supported the new direction.

Making a public representation, Warrenheip resident and business owner Ernie Auchettl said everything that had happened in precinct for 20 years had been to the satisfaction of Rivers and not what Warrenheip or Ballarat wanted and needed.

“It seems the council has just become puppets of some higher authority,” he said.

“Great proposals would come out that they’re going to do that or they’re going to do this. Nothing ever seemed to happen there.”

He described the ad-hoc zoning of the area as “a mess” but said for residents it had been “very hard to get a concrete answer to anything”.

Mr Auchettl said he had tried to gain permission to subdivide his own block but he failed to make any progress with town planners.

The Woodmans Hill Gateway Precinct Master Plan will now be be revised to remove any references to Rivers Park.

The council also voted unanimously to withdraw a request to rezone the land.

But councillor John Philips asked planning staff if the realignment of the highway at Warrenheip would be an issue with Vic Roads.

Ms Reiter said the various authorities had been involved in the process and a huge amount of work had gone into ensuring it was still a positive outcome.

In October, Rivers Australia said the Woodmans Hill development would create 400 new jobs in Ballarat. 

But Specialty Fashion Group (SFG) took over Rivers Australia for $5 million only weeks before councillors voted to unlock the land in preparation for a new employment precinct around Rivers Park.

SFG was unaware of the council’s decision to review the proposed development, its chief executive, Gary Perlstein, said.

rachel.afflick@fairfaxmedia.com.au