Commissioners unanimously rejected the proposal after several residents and business owners voiced concerns.
Some residents are worried new zoning would cause dangerous traffic conditions in their neighborhood.
Residents of Matlock Heights asked the City Council to help them establish their neighborhood as a conservation district to maintain the integrity of the area.
McCabe says Big Woods still plans to expand, but is looking at other locations including sites outside of Brown County.
A Vigo County resident is seeking to have his land rezoned so he can drill for oil.
Plans call for both single-family home and a larger structure where as many as 15 families can live.
Members of the Monroe County Plan Commission are hoping to take a vote by this December on an amended comprehensive plan for the county.