The planning and highways committee vote was five against the plans, three in favour and one abstention.
The decision to refuse the proposals to replace three vacant Georgian buildings between 162-170 Devonshire Street with modern, glass-fronted, grey-brick offices was on grounds of amenity and design impact.
Councillor Peter Price, who voted against the plans, said: “I like the building, it’s an exciting building and I like the way the city is being developed in a modern and exciting way, however it is in the wrong place and I’m not going to support it.
“I’m a republican but I’m going to quote Prince Charles when he said ‘it’s a carbuncle’ and it’s a carbuncle on the end of a very precious part of Sheffield in my view.”
But not all were in agreement.
Before voting in favour of the development, Coun Tony Damms said: “I don’t know which way I am going to vote, I like the building but I struggle with some bits of it. It might have been easier to support if the bricks had been more in keeping. I’ve got a very short time to make sure which way I go. I don’t like to abstain on these matters but, as everybody said, in another area it would have been a great building but I just think it is a bit jarring.”
Ahead of the decision, there were more than 60 written objections to the plans, including from Hallamshire Historic Buildings and the residents’ association for the city centre.
Objectors said the buildings should be restored as they are of historical interest and raised a number of concerns including that they believed the proposed development would have a negative impact on the character of the area.
The buildings were a row of independent shops including Rare & Racy – which opened in 1969 and sold second-hand books, music and art for almost 50 years.
Planning permission was granted in 2015 to demolish the buildings and replace them with a three-storey building with ground floor offices and apartments above.
The original plans were opposed by 20,000 people and there were demonstrations outside the Town Hall. Pulp frontman Jarvis Cocker called Rare & Racy a “global treasure”.