A petition has been set up after plans were announced to convert V Bar in Seaford into homes.
Residents said the building would serve the community better by providing a retail service.
But in a planning statement to Lewes District Council the agent said keeping it as a pub was not viable and that it had been marketed for more than a year at a fair market rent and on flexible terms.
The agent Tezel Bahcheli has applied for planning permission on behalf of the owner to transform the property in Pelham Yard into three residential units.
The petition said: “The V Bar is in the centre of a commercial part of Seaford town centre surrounded by busy retail outlets.
“There is a steady flow of commercial traffic all day.
”We consider this proposed residential development to be unsuitable for the town centre.
“The current debate led by the department of communities and local government on improving our high streets and town centres (also the Portas Pilots) encourages us to support more businesses in the town centre, not less.
“We believe that this building should be maintained as a mainly commercial unit.
“We believe that as a seaside town and tourist destination, this building would better serve the local community and its visitors by providing some form of retail service.”
Almost 20 residents signed the petition. Seaford Town Council was against the scheme too, pointing out turning commercial property into residential was against the district council’s policy.
News that the pub could be turned into homes prompted business Martin D Johnson Antiques Limited to tell the council it could be forced to move out if the application were approved.
This was due to fears the extra homes could make it difficult for lorries to access its warehouse, which is next to the site.
In a letter to the council Mr Johnson said: “We have made several reasonable offers over the last 12 to 18 months, in an attempt to purchase this property and retain its status as a food and drink establishment.
“We were under the impression that buildings of this sort were subject to change of use only if there was no possibility of the building being retained for its previous use.
“We presented this opportunity and even an offer suggested by the estate agent was rejected.”
The agent also said a marketing report demonstrated there was no demand for the property as a pub or restaurant.