Reading planners have refused a scheme to turn Napier Court - three offices opposite Kings Meadow - into 570 flats next to Tesco and within walking distance of the station.
Peveril Securities had applied in 2024 to replace the offices with six apartment blocks up to 11 storeys.
Principal planning officer Matt Burns recommended refusal, in part because the scheme offered no affordable housing.
At the planning committee Councillor Josh Williams praised the design and mix - 211 one-beds, 305 two-beds and 54 three-beds - but said: "The affordable housing is unacceptable at zero."
Cllr James Moore said: "Given this application was first submitted over two years ago, and they got so much right on this application, it’s just so disappointing they got so much wrong after taking two years to get to this point. I just hope we get something better for this brownfield site because it sitting empty doesn’t really help anyone."
Days before the meeting Peveril agreed developer contributions totalling hundreds of thousands of pounds, including £500,000 for public realm improvements, £492,480 for health facilities and £20,000 for tree planting at Kings Meadow.
Lead councillor Micky Leng criticised the developer's approach after a site visit: "On the site visit, it was unkept, it had been broken into, there was still the old bins there, there was litter, there was graffiti, and there was no boarding up." He added: "No affordable, no development."
Planners also warned the scheme would compromise a future East Reading Mass Rapid Transit route. Cllr Leng said: "We’re looking at a decision that could, in 10 to 15 years, see people look back and say, ‘why did they surrender that strip of land?’ I don’t want to be on a committee that does that."
Councillors unanimously refused the 570 flats.
James Aldridge, Local Democracy Reporter
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