Mitchell Elvin's plans for a juice bar and cafe in Blacksmiths have been reduced to a quarter of the original size.

Mr Elvin had planned to build a 36-square-metre shop on land adjoining backpackers lodge Blacksmiths Beach House, which he owns.

It will now be built on a smaller, existing deck after Lake Macquarie council rejected Mr Elvin's appeal to lower the development's floor height.

The original plans for the juice bar and cafe were approved by the council in 2013, with the condition that it be built two metres above sea level in accordance with one in 100-year flood projections.

Mr Elvin sought to reduce the floor height to 1.83 metres to allow disabled access and maintain the streetscape.

Councillors voted 10-1 against Mr Elvin's appeal, with councillor Jason Pauling the only one in favour.

Councillor Laurie Coghlan said it was a "difficult" matter.

"On principle I supported the amendment to the application," Cr Coghlan said.

"I do believe on some occasions the council has to be a bit flexible [on sea level rise development restrictions].

"But that was the decision council made and I'll always support the council's decisions."

Mr Elvin said he was "bitterly disappointed yet again" to hear the council had rejected his appeal after the matter had already been deferred.

He hopes to have the juice bar and cafe built within a fortnight.