Church chiefs hope to revive plans to turn an historic town centre landmark into a community centre.
Worthing councillors have rejected their bid to knock down St Paul's Church hall and build a three-storey block of flats for people with mental health problems.
Under the proposal the church, in Chapel Road, Worthing, would have been used as a community centre.
The project team has spent 18 months and £40,000 putting together the plans.
Now members want to sit around a table with councillors and put together plans for the 189-year-old church.
Trevor Leggo, project co-ordinator, said the team was disappointed by the council's decision and hoped the project would be able to go ahead after further consultation.
Mr Leggo said: "The refused application is the product of about 18 months' careful preparation and consultation and some £40,000 has already been spent to reach this stage.
"Delay is not just inconvenient but damaging for the fabric of the building, in particular the recent discovery of dry rot.
"Without planning or listed building consent any approach made to funders is virtually impossible."
Councillors went against their officers' advice when they rejected the plans, saying housing was inappropriate on the site and would affect the area around the listed building.
Mr Leggo said: "It is encouraging on the one hand that members of the planning committee remarked on the importance of this historic building in the town but somewhat discouraging that the opportunity to regenerate the site has been lost on this occasion.
"The project team stands by its original aim to develop St Paul's as a centre for Christian care in the community.
"There is nothing the project team would enjoy more than a constructive dialogue with borough councillors to achieve the best practical solution for the future of St Paul's."
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