City of Newcastle has again rejected a redevelopment of the former Mon's restaurant building in Darby Street, Cooks Hill, over heritage concerns.
Labor councillors and Greens councillor John Mackenzie outvoted the independents and Liberal Brad Luke on Tuesday night to refuse the four-storey apartment building.
The council knocked back a five-storey building on the site a year ago despite staff supporting the project.
The proponent, Robert Dawson, appealed against that outcome and consulted council staff before submitting new plans for a four-storey building.
Mr Dawson has also lodged an appeal in the Land and Environment Court.
Lord mayor Nuatali Nelmes noted the developer had altered the building so it was compliant with height limits and was less obtrusive on Darby Street.
But she remained concerned about the loss of the building's heritage facade.
"Every time you chip away at a pretty iconic stretch of eclectic architecture ... unless there's some recollection or nod to the heritage of that site, even if it is only 1940, I think erring on the side of caution would stand us in good stead in terms of heritage," Cr Nelmes told the council's development applications committee meeting.
"You could easily keep the facade ... which dates from around that 1940 period."
Cooks Hill Community Group spokesperson Glenn Burgess said after the meeting that the "lord mayor came through for heritage".
"Of course, the applicant has already flagged an appeal to the Land and Environment Court, but it is good to see councillors supporting the community view," he said.
The staff report said the amended development was "sympathetic to the Cooks Hill Heritage Conservation Area and the Darby Street character and streetscape".
Independent councillor John Church, arguing in favour of the redevelopment, said it would be a "terrific addition to the city landscape".
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