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City of Ballarat infrastructure and environment director Terry Demeo said in a statement the application will return to council on May 27.
"A digital sign has been the subject of a planning permit application to replace an existing illuminated advertising sign located above 101-107 Sturt Street in the Ballarat CBD," he said.
"The application has been considered at department level where the proposal was supported. However, the application will be the subject of a report to the Council meeting on 27 May.
"The recommendation to Council will be not to support the application as it progresses to the Victorian Civil and Administrative Tribunal."
PREVIOUSLY:
An electronic billboard atop a Sturt Street building may go ahead, despite concerns from Ballarat heritage activists.
Applicants Citizen Outdoor have received a notice of decision to grant a permit for the nine metre by three metre billboard, however the City of Ballarat has stipulated the sign can only be active between 7am and sunset with a decreased illumination level, each image must not move and can only change once every minute, and must not "dazzle or distract" drivers.
The existing sign is slightly larger than the proposed new sign, and has been defaced with graffiti.
The notice of decision is not a permit approval, but is an indication that council will grant a Planning Permit if no objectors lodge an application for review, or appeal, to VCAT.
Citizen Outdoor director Wes Randerson said in a statement heritage advisors were consulted on the sign upgrade, with a heritage assessment report and lighting impact assessment submitted.
"The building has a long history of accommodating promotional signage and this is considered to be an entrenched contributor to the character of Sturt Street," he said.
"In this context, the proposed upgrade of the sign (from floodlit to digital) and a decrease in overall size proposes limited additional visual impact and results in a neater appearance.
"Significantly, promotional signage (including electronic signage) is not prohibited in heritage areas and there are many examples of electronic signage in heritage contexts."
Mr Randerson added the proposal complied with the VicRoads' Ten Point Safety Checklist.
"There are no traffic engineering reasons why the sign should not go ahead," he said.
"Furthermore, the upgrade of the sign will have a number of community benefits, such as sponsored notices (on behalf of transport authority, fire authority etc), advertising from selected community organisations and local businesses, and notices about community events."
Stuart Kelly has long opposed electronic signs - a member of Ballarat Heritage Watch, he said he was concerned objectors were being shut out of council decision making.
"To me, council should be protecting the heritage rather than relying on individuals or bodies, or community groups to do it," he said
"I'm wondering why things that are likely to be contentious, like this, would not be discussed in council, and then allow individuals to make representations at council."
A second objector, Peter Kervarec, created a digital concept image of the billboard to submit to council.
Among his concerns was the potential distraction for tourists who visit Ballarat to see the heritage buildings - Mr Kervarec is a photographer who said he had lead groups around the city during the Ballarat International Foto Bienalle.
"It's a tourism zone, right next to the gold can and opposite the Titanic bandstand, both important parts of our heritage," he said.
"I guide local and interstate tourists, that's what they come here for, they tell me that - a couple of Germans told me they came here especially to see the old buildings."
The applicant and complainants have until May 24 to lodge an appeal with VCAT.
The City of Ballarat was contacted for comment.
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