Politicians on the Planning Applications Committee reversed the advice of the Planning department and rejected the proposals.
They decided that the harm to neighbourhood amenities, the scale of the development and the impact on listed buildings and the character of the area were too great to let the development go ahead.
Developers Castle Properties (Jersey) Limited wanted to build on the former Play.com warehouse next to the Co-op Grand Marché in the north of town.
But 28 local residents had argued against the plans, which they said would lead to overcrowding.