Plans for a 60-bed care home on the former Winners Bargain Centre site were kicked out on Thursday night.
Although councillors and planning officers agreed a care home would be a good use of the plot in Victoria Road, none was in favour of the scheme put forward by applicants Montpelier Estates.
Plans would have involved the demolition of the existing buildings and the construction of a flat-roofed care home of up to three storeys in height.
Cherwell District Council leader, Councillor Barry Wood, said: “Ultimately, the difficulty is, it’s a good idea for the place but it’s too packed in and the design’s no good.
“Go back to the drawing board and start again, chaps.”
A planning officer had identified a number of key problems with the design, including the lack of a positive frontage onto Victoria Road or Linden Road, and the proposed building’s close proximity to several of its boundaries.
Referring to the officer’s report, development control team leader Bob Duxbury said: “The scale of the proposed building does not fit well with the scale of the adjacent houses.
“It’s a design that dwarfs the adjacent buildings.”
Several residents had sent objections and observations to the council.
One said the care home would overlook homes and gardens in Bath Terrace, while another feared disturbance from noise and light.
One comment was that the building, “looks huge and extremely high – dwarfing the residential properties and dominating Linden Road”, while another said the design was better suited to an industrial area.
Others felt the site should be kept for retail, and that a care home would not add to the vibrancy of the town centre.
Councillor Mike Kerford-Byrnes, of the Astons and Heyfords ward, raised concerns about the extra traffic around Victoria Road.
He said: “A 60-bed care home with 55 residents will generate quite a lot of visitor traffic.
“Visitor traffic peaks at the weekend and in the afternoon.”
He also said it was important for care homes to be in pleasant surroundings.
“Anything to ameliorate the disruption to residents is greatly respected. A lot of care homes go to great lengths to make sure their views are attractive.
“There are places probably in this district where the view will be considerably better than the one from the second and third floor windows looking south-west across Victoria Road,” he added.
Bicester Town Council had objected strongly to the plans, saying the area should be kept for town centre expansion.