After a resource consent hearing on Tuesday, Mr Hamilton said Lakes Environmental (LE) told his planner he would not need to supply further information because his consent would be declined.
"I'm gobsmacked - I've spent more than $100,000 on the planning process. I'm passionate about the old buildings and I see this as the front door to the Cottage Trust," Mr Hamilton said, referring to the adjacent Buckingham St cottages restoration project.
Technically, the hearing is in adjournment and LE planner Wendy Rolls said she could not comment on the outcome until the commissioners had given a decision in writing.
Mr Hamilton said he thought Queenstown Lakes District Council commissioner David Collins, of Christchurch, rejected the bid because he was not familiar with the nature of the 10 cottages in the Buckingham St restoration project, run by the QLDC-appointed Arrowtown Trust.
"The community's gutted and my phone's been running hot," he said.
The Tap is housed in the Colonial Bank premises, built in 1874, and Mr Hamilton said the old stone cottage was the "front door" to the historic Buckingham St cottages - also known as the "Miner's Cottage" precinct.
He said the project was snagged by a "serial objector" who was "flying in the face of widespread community support".
Two other submitters opposed and two backed the consent, including the Queenstown and District Historical Society, who said the development would "contribute to the ambience of the Miner's Cottage precinct".
Mr Hamilton wanted to build a 100sq m weatherboard building with a corrugated iron roof behind the old stone building and move his nearby Ramshaw Lane wine shop there.
Meanwhile, the back section of the The Tap would be lifted, with a new kitchen and bathroom facilities on the same level as the historic building.
When the resource consent was lodged in July, Mr Hamilton said the upgrade would bring the historic building and adjoining garden bar into line with the rest of the town's main street.
The Tap building is residentially zoned but has been a commercial site for most of its life, although it has never formally designated as such.
