However, O’Callaghan Properties (OCP) vowed last night to address the design concerns raised by An Bord Pleanála about its Western Road project and submit a new planning application within weeks.
The company said they were obviously extremely disappointed at the ruling, particularly as the inspector favoured permission and the ruling was a marginal five to four against.
"It was a project that could have started in April and would have created 350 construction jobs and 300 permanent jobs, so in the current economic climate particularly that is very regrettable," a spokesperson said.
However, the spokesman said the company is encouraged by the board’s view that a change of use on-site to hospital use is acceptable.
He said the company will address concerns around the design with a view to submitting a fresh application to Cork City Council by mid-January.
"On that basis and bearing in mind the board’s advisement, we would hope to be in a position to commence construction... in June/July 2010," he added.
The city council granted permission to OCP earlier this year, with 19 conditions, to build the 100-bed private hospital on a two-acre site on Lancaster Quay, Western Road, close to where the company developed Jurys Hotel and the apartments.
At 140,000sq ft, the proposed hospital will include six operating theatres and 20 consulting suites. It is expected to employ up to 300 healthcare professionals once fully operational.
It will be run by leading Swiss-based private hospital operator La Tour Réseau de Soins.
However, a shop steward in the Mercy University Hospital was one of two men who lodged objections with An Bord Pleanála against the project.
Graham O’Reilly, from Mayfield, raised several concerns, and argued the hospital was contrary to the zoning of the Lancaster Quay site and claimed it would result in a loss of views of St Fin Barre’s Cathedral.