The development application, lodged in October 2020, involved demolishing two existing dwellings and replacing them with a six-storey building providing ground floor commercial space and five levels of holiday accommodation at 27 and 29 Livingstone Street, South West Rocks.

The development proposal was for a 17.36-metre-high building that is 57.5 per cent over the maximum height prescribed for the South West Rocks Town Centre, including the subject site, by the Kempsey Local Environmental Plan 2013 (KLEP).

The application was placed on public exhibition for a period of 14 days from the October 20 to November 3 2020.

A total of 105 submissions were received during the public exhibition period. A further four individual submissions and a petition with 70 signatures in the form of 70 separate proforma letters were received after the closure of the public exhibition period. These submissions overwhelmingly opposed the proposal with the most cited reason for objection being the height of the proposed building.

In reaching the decision not to approve the application at Tuesday's ordinary meeting, council found agreement with much of the feedback from the community to the project.

Council's Manager Development and Compliance, Graham Snow, said council had received a strong response from the public who were overwhelmingly opposed to the development.

"The feedback from the public was particularly concerned with the height of the proposed building," Mr Snow said.

"In the report that was voted on, council staff listed 13 grounds for refusal. Those reasons included exceeding the height limit without sufficient justification, the development being inconsistent with the future character for South West Rocks and failing to assess the heritage value of the cottages currently on the site. The applicant had also failed to provide sufficient information to council."

Councillor Anna Shields also highlighted the impacts a building of this size would have on the coastal town during the council meeting.

"I do feel that if we were to approve it, we would be on our way to abandoning our development standards because the height is so far above what our standard building height is," she said.

"It also doesn't appear to meet the desired outcomes of a seaside village, particularly in regards to the surrounding buildings.

"It also doesn't appear to be in the public interest. There is also the concern of what a building like this would have on neighbouring properties such as view loss, overshadowing and privacy loss."

South West Rocks is expected to experience the most significant growth within the shire over the next 25 years. The population of the area is estimated to grow by almost 50 per cent or 2575 residents by 2036. This population growth will require an additional 1200 new dwellings.

"We have a significant challenge in balancing the need to support the economic benefits of growing South West Rocks by a further 1200 dwellings, against the strong desire to preserve a village atmosphere," Mr Snow said.

"Strong and consistent planning structures that look at community desire alongside the legislation and demand is going to prove very important as we face more and more of these crossroads in coming years."