The Nightingale project on Davey Street has taken another step closer following a VCAT ruling.
The planned apartment block aims to provide a different model of in-fill housing close to the Ballarat CBD, between the new GovHub project and the medical precinct, with 27 apartments and a cafe in a five-storey building.
Project manager Jen Kulas said a "mutually agreeable" arrangement was reached with existing residents and the City of Ballarat.
"Concerns from residents led to some changes, including licensing for cafe, and we've looked at changing one of the car share zones to a loading or emergency zone, but there's still two parks out the front," she said.
"Powerlines are being put underground, the footpath in front will be reinstated, and we're restoring heritage signage on the southern facade."
In a statement, the City of Ballarat's infrastructure and environment director Terry Demeo confirmed the VCAT decision.
"A consent order negotiated by the applicant and the objector has been issued by VCAT," he said.
"City of Ballarat considers this to be an exciting development for the community and we look forward to its commencement."
Ms Kulas said she hoped construction would begin in September this year - a Nightingale email noted demolition of the existing buildings would begin soon.
The building's developer, Joseph van Dyk of Hygge Properties, said Ballarat's property market remains strong despite the ongoing pandemic crisis - he's also involved in separate developments on Lydiard Street, in Mount Clear, and in Daylesford.
"We're still getting inquiries, and we think it will pick up where it left off," he said.
"There's a shortage of housing in Victoria, and Ballarat - if we look at where the market was before the pandemic hit, it was on a rapid rise, and we think we will get back to that point by Q1 or Q2 next year depending on how long this extends out for."
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