First, I'd like to note that this is not the first time that Dandenong has been mentioned in relation to a VicRoad's relocation. On SkyscraperCity, the move to Dandenong has been raised as a serious possibility several times over the past 5 years (e.g. here). What's more, the announcement of the possible move to Ballarat in March came out of the blue without any discussion of the alternatives. So I just want to be clear that the matter of where VicRoads will relocate to is still quite open and always has been.
There is much to recommend a VicRoad's move to Dandenong. From the perspective of many existing employees, commuting without relocating will be quite feasible, and should be relatively easy given it is in a contra-peak direction from Kew. More than that, Dandenong has excellent public transport and road links in general, which makes commuting by almost any means very easy. Dandenong also sits at the centre of a rapidly growing region, with a 20 minute commute catchment that already exceeds a million people. Commuting is very easy from major surrounding areas such as Frankston, Cranbourne, Berwick, Ferntree Gully, Glen Waverley, Clayton and Cheltenham. I'd imagine that Ballarat has more to offer in terms of amenities for employees at this point, but that's partly a chicken-and-egg problem, and I think Dandenong already provides quite a bit in the way of amenities such as interesting and diverse food, retail offerings and, of course, our market.
If benefit to the local community is considered an important factor (which it clearly was in the decision made by the Liberals), then I find it very hard to believe that any place would benefit more than Dandenong. Due to the state government's lengthy revitalisation effort, any new development enjoys a synergy that generates more than the average return to the local community. By the same token, the work needed for the revitalisation has itself come at a cost to the city that we have yet to properly recover from, and this would help immensely. The economic benefit from development would help in other ways as well; we accept the largest number of refugees of any suburb in Victoria and we have some of the highest rates of socioeconomic disadvantage. The boost from development would go a long way to helping the city cope better with such heavy demands.
I also believe that a VicRoads development could bring us to the revitalisation's tipping point. All throughout the redevelopment effort, the government and Places Victoria (VicUrban) have completely failed to attract a commercial development to the city that would be truly new. They've failed to establish a tertiary campus in the centre; they've failed to attract any of the offices that quite happily inhabit car-dependent areas of Mulgrave, Clayton and Glen Waverley (and to some extent, Dandenong South); they completely botched the South East Water negotiations; and the private hospital proposal has quietly vanished, while major proposals and redevelopments for hospitals push forward in other areas such as Casey, Knox, Box Hill and Clayton. While we do have new council offices and a new government services building, the net addition to the local workforce has only been on the order of 300-400 or so jobs, much of them cannibalised from our own city anyway. VicRoads would be a fresh set of (at least) 400 workers. I strongly believe that this would be sufficient stimulus for the revitalisation effort to finally become self-supporting.