The Wyevale Garden Centre in Aldridge, earmarked for closure by new owners, sees fresh uncertainty over its future.
The site in Walsall, was is to transform into 11 three, four or five-bedroom homes. The council has refused the application.
Planning bosses said proposals to redevelop the land were unacceptable. Some of the homes would be on surrounding land classed as green belt.
They also opposed the plans because they looked to redevelop the entire site. There was no attempt to convert existing buildings. There are also no bus services available for possible residents.
Concerns were also expressed that the new homes would be overbearing to nearby existing properties. This would not be able to guarantee enough privacy for neighbours.
Ward Councillor John Murray said: “Along Chester Road there are high quality houses that are being developed. Housing is not a problem at all.
“Unfortunately, the planners have decided to refuse these plans. I hope that Wyevale come forward as soon as possible with alternative plans.
“Providing it is developed and it is not left as an eye sore, I support it.
“The last thing we would want is somewhere to lie derelict.”
The future of the centre is now uncertain.
UKS Group bought the site in September after it went on the market for £800,000. The intent was to develop the site into homes.