The Harwood Group had applied to build a six-story residential building on the site, but zoning only allowed for four.
Residents rallied against the proposal because it was against the community's vision and sent more than 300 letters to city hall about their concerns.
Brian Jackson, the city's general manager of planning and development, says roughly 80 per cent of the letters were against it.
He says the planning department found the proposal did not meet city regulations.
"If this would have been rental housing on top of Stong's, there would have been rental policy that would have allowed us to consider a building of six stories. But the applicant was proposing condominiums on top of Stong's."
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