Westleigh Partnerships Ltd want to knock down the former Hi-Lites Signs factory at 18-20 Ramsgate Road in favour of building eight apartments.
But East Lindsey councillors refused the application after noting objections from both Louth Town Council and planning chief Chris Panton.
Mr Panton said: “The design may not be everyone’s cup of tea, but it’s a quirky building and any replacement needs to of higher quality than that proposed. I feel the applicants could come up with something a lot better.”
Agreement came from Coun Stuart Watson, who commented: “There is potential for a seriously good and prestigious development.”
A different perspective came from Coun Sid Dennis, who described the building as ‘a monstrosity’, but he felt the wish of the Town Council for it to be retained should be respected - a view shared by both Coun Tom Ashton and Coun Steve Palmer.
Although he expressed his distaste for the design of the proposed replacement, planning committee chairman Coun Neil Cooper made no attempt to disguise his contempt for the mock-Tudor facade of the building.
To chuckles from colleagues, he joked: “I’d be looking for it to be accidentally hit by a partially-sighted digger- driver.”
The applicants, who were not represented at the meeting, have the option of submitting a revised design or of lodging an appeal, which would be heard by an independent inspector.