A proposal to redevelop the former London Fire Brigade headquarters on Albert Embankment with 265 new homes was turned down by Lambeth Council's planning applications committee on Tuesday night.
The London Fire and Emergency Planning Authority agreed to sell the site to developers Native Land in 2007 but the fire service will not receive the multi-million pound proceeds of the sale until planning permission is granted.
Native Land's latest proposals were turned down by Lambeth councillors on Tuesday night with three votes and one abstention.
The developer proposes to convert the upper floors of the listed riverfront building to flats and demolish the buildings west and east of Lambeth High Street to make way for seven new buildings designed by Lifschutz Davidson Sandilands ranging from 1 to 15 storeys in height.
New fire station facilities would be provided at ground level of the front building.
The scheme is named Florian Place after St Florian, patron saint of firefighters.
"This is a major application which raises a number of significant issues, including the interpretation of our policies, the impact on heritage assets and the impact of residential amenity," Andy Gutherson, Lambeth's interim head of development management, told the committee.
"Lambeth as an authority is encouraging inward investment and development opportunities around the borough.
"There is a challenge therefore that when such schemes are brought before the committee there is a positive response from the council to facilitate the delivery of the schemes."
He went on to highlight the benefits of the scheme, including 265 new homes, around 800 new jobs and retention of the historic fabric of the fire brigade building.
Opposition to the scheme has been led by residents of Whitgift House who unfurled a giant banner bearing the words "Don't put Whitgift in the dark".
Michael Ball, director of Waterloo Community Development Group, explained that the application was contrary to Lambeth's own planning policy because part of the site falls within a designated key industrial and business area (KIBA) where employment uses should be protected.
He disputed evidence from Native Land which claims that there is an oversupply in the local office market and reminded the committee that the borough's own planning policy officers had objected to the scheme.
The committee also heard from Dr Paul Ettlinger of the 9 Albert Embankment Residents' Association, who opposed the application on heritage grounds.
George Turner, representing Whitgift Estate Tenants' and Residents' Association and the Friends of Lambeth High Street Recreation Ground, questioned the economics of the scheme and drew the committee's attention to the impact the new buildings would have on the occupants of Whitgift House.
"Last year the CEO of Native Land – in an interview with the Evening Standard – said that 50 per cent of the sales at Neo Bankside just down the river in Southwark were to investors in the Far and Middle East," he said.
"If built, many of the apartments will be sold abroad as investment product and will stand empty, contributing nothing to the local community."
Mr Turner added: "No-one here is arguing against development in principle – we simply do not believe that this particular development is good enough to justify the clear breaches of Lambeth planning policy and overcome the objections raised by local businesses, community groups, residents, council officers and local elected reprepentatives who have all come here united in their opposition to the scheme.
The residents' objections were backed up by Kate Hoey MP and Cllr Lorna Campbell who both addressed the committee.
Rita Dexter, deputy commissioner of the London Fire Brigade, spoke as a supporter of the application. She highlighted the strategic importance of Lambeth Fire Station due to its proximity to the Houses of Parliament and other potential terrorist targets.
"In the three years between April 2008 and March 2011 fire engines from Lambeth were mobilised on over 4,000 occasions to emergencies in the local area," said Ms Dexter.
"They made a further 3,500 mobilisations to incidents in neighbouring areas and to support other incidents across London."
The brigade's rapid response team for chemical, biological, radiological and nuclear incidents in London is based at the station.
Jim Pool of DP9, representing Native Land, told the committee that the developer's plans had changed several times over the last four years in response to feedback from local residents and others.
"We now feel that a fair Balance has been struck between all the competing objectives that govern the site," he said.
He explained that the low level of affordable housing in the development – eight per cent – was a function of the priority given to increasing the amount of commercial space in the scheme.
"It brings a predominantly vacant major development opportunity site back into an active use, generating jobs, housing and a new fire station," said Mr Pool.
"When this is considered alongside the substantial contributions to parks, sport, health, leisure, education and transport, we believe that the development should be strongly supported."
Acting chair Cllr Ruth Ling moved that officers' recommendation to grant planning permission be accepted, but no other member of the committee would second her motion.
Cllr Jane Pickard moved an alternative resolution that planning permission be refused. She was especially concerned about the impact of the development on daylight to Whitgift House and Lambeth High Street Recreation Ground.
She also disliked the proposed glass rooftop extension to the listed riverside building.
Cllr Jennifer Brathwaite agreed with Cllr Pickard.
Cllr Julia Memery added that she was concerned by the low level of affordable housing in the scheme.
Mr Gutherson explained that "the proposal does include an overage clause to enable a future uplift of affordable housing if further profits are made from the scheme".
He confirmed that the developer had been encouraged by officers to maximise the employment floorspace in the development.
It seems likely that Native Land will appeal the council's decision, handing the final say to a Government planning inspector.