Kollaras Group managing director John Kollaras said this had left his family "considering all options available" - which may include submitting new plans or appealing the decision in court - and that he was disappointed with the refusal after going through a long process to gain approval.

The prominent property development clan has been trying to redevelop the harbourside block at 82A Cliff Road for almost a decade, and has floated various designs for multi-storey buildings that have failed to gain support.

Read more: A deep dive into the Illawarra's dancing in the dark movement

The Wollongong Local Planning Panel unanimously knocked back the most recent plan to transform the old two-storey apartment building into a six-level duplex, which would have had many extravagant features such as butlers' pantries, his and hers walk-in wardrobes, boat parking in the basements, a top-storey plunge pool, cellar and banquet area.

The reasons for the decision were that the panel thought the way the building presented to the neighbouring Osborne Park - which is a significant heritage site - was "unacceptable".

They also said the proposed development was "an overdevelopment of the site and does not respond to the sensitivity of the context of the site"

"The proposal has not responded appropriately to the sites constraints," they said in their decision.

During a public hearing held last week, panel chair Alison McCabe said she did not think the design of the building had "generosity" or adequate consideration of the public domain, despite being luxurious and generous in its internal layout for the occupants.

Other panel members raised concerns with the way the building presented to the street "as a five-storey building" and looked more like an apartment block than a duplex, and said it was too bulky, too wide for the narrow site and did not comply with the council's set back rules.

Mr Kollaras said he believed both the decision, and the reasoning behind it were "disappointing and, we believe, wrong".

"We do not believe the subjective concepts of luxury and internal layout are particularly relevant to the refusal, despite these comments," he said.

"The only way a private property can effect a neighbouring public domain is through respecting it through sensitive design and consideration of the planning guidelines, we have we feel achieved this in the design put forward."

Another sticking point, which was raised in a Wollongong council officer assessment of the plans, which also recommended refusal, was that the proposed building had failed to adequately consider the heritage of the existing building itself and the surrounding area.

The council's heritage officers suggested Belmore Flats may be eligible for a listing on the local heritage register.

Appealing to the panel not to refuse the plans in the meeting, architect Mark Jones said developers had worked very hard - through an "extensive and expensive process" - over 12 months to come to a new solution to develop the site, and that he was "gobsmacked" to see the council using heritage concerns.

"This has been on council's desk for the best part of eight years and in that time council have not made the move to list [the site] with the state or even on the local heritage list," he said.

"We're gobsmacked to find that after all the consultation, that heritage seems to be what's going to trip this up."

Likewise, Mr Kollaras said the heritage suggestion "lacks substance" as council officers suggestions were not consistent with those from higher authorities such as the State Heritage Council.