The council narrowly refused a £35 million development off Ecclesall Road, citing the scale and window placements as the main concerns.
The application was rejected seven votes to five, leaving developers Hallminster Ltd ‘dismayed’ as they plan to appeal the decision.
The development, between Summerfield and Pear Street, would have provided 120 apartments, 44 student accommodation flats, and more than 2,000 square metres of retail space.
The Local Planning Authority deemed the development, made up of four building blocks, ‘out of scale and character with the immediate surrounding area’.
Suggestions to scale back the 12 storey student accommodation building were rejected by the developers, who claimed the change would yield lower profits.
The planning committee also found fault with the layout of 16 bedrooms in eight apartments.
As the only source of light, the window placement meant the bedrooms would be shrouded in darkness if they were blocked by any future proposed developments.
This second space, described as an ‘eyesore,’ is currently inhabited by a car wash and Kwik Fit.
Councillor John Booker said the committee was ‘nitpicking’ with the windows and called the plans ‘well designed’.
Councillor David Baker acknowledged the importance of creating housing in Sheffield, but said: “There’s no reason to blindly rush into planning applications that are not perfect.” He added there were “too many factors that make it undesirable.”
Dan Simpson, of Hallminster Ltd, said: “We are extremely disappointed that planning permission was refused for a scheme that council officers accept will have regeneration benefits for part of Ecclesall Road.
“We believe the design of the development is top quality and appropriate for the location.
“It was described as imaginative and in keeping with its surroundings during the public consultation process.
Darren Southgate, of Bond Bryan Architects, said: “This is the first time a development we have designed – and we work in cities such as London, Manchester, Leeds and Sheffield – has been taken to appeal. Our quality is so high that designs have been welcomed by authorities across the country.”