
Developer Fragrance Group had wanted to turn the Grade II*-listed building in Bath into a 167-bed hotel, and promised to invest £35m to preserve it.
But councillors said it would make life in nearby properties "almost untenable" and voted to overturn officer advice.
A spokesperson for the developer, said it was "very disappointed" and it will be "considering" its next steps.
The Singaporean firm's plans, which included a heath spa and restaurant, were revised in response to consultation feedback.
At the Bath and North East Somerset Council's planning committee meeting, local resident Helen Wilmot, criticised the proposed extension due to residents potentially losing "privacy, natural light, our view of the sky".
Despite planning officers saying securing an "optimum viable use" for the building outweighed the impact on neighbours, the committee voted to reject the application.
Councillor Sue Craig, said the developer would be using "every inch" of land for the extension which would be overbearing for local residents.
While councillor Manda Rigby said it would make life in neighbouring properties "almost untenable".
"For some of the flats on the lower floors, you'd almost have to stick your head out the window and turn it around to see any sky whatsoever," she said.
A spokesperson for Fragrance Group said: "We are very disappointed with the planning committee's decision and will be reviewing their comments and considering our next steps."
September 25, 2020 at 04:36PM
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