Hartlepool Borough Council is in negotiations over the development of a hotel on the former Jacksons Landing site.
Councillors voted to demolish the former retail outlet on Hartlepool Marina during a heated meeting at the town’s Civic Centre.
Following discussions and a vote on whether to approve the demolition proposals, the meeting had to be adjourned before being reconvened minutes later.
The council bought the site in 2013 for £1.5m with a two-year interest-free loan from a Government growth fund.
The five-acre site, empty since 2004, is identified for transformational development in the Hartlepool Regeneration Masterplan.
At a meeting of the authority’s Regeneration Services Committee, Denise Ogden, the council’s director of regeneration and neighbourhoods, put forward the case for demolishing the existing building on the site.
“The building has become associated with failure,” said Ms Ogden.
“This plan provides the council with the strategic opportunity to deliver transformational change and growth for the local economy.
“There could be leisure, cultural and hotel uses for the site.
“A development brief has now been created to attract private investors and in fact we are in negotiations with a national hotel developer.”
Member of the public Eric Porritt suggested the site could be used for an educational site for boat building and repair work.
“Skills acquired by the older generation could be passed on,” said Mr Poritt.
Independent councillor Paul Thompson said he is the demolition proposals.
“I can’t bring myself to support it without a credible plan when we have already spent a king’s ransom on buying Jacksons Landing in the first place,” he said.
Resident Fred Corbett argued that he saw no need to demolish the building on the site.
“I can’t understand the rationale,” he said.
“The council should knock the cost of the demolition off the price of the building.”
Chairman of the committee Councillor Kevin Cranney then held a vote on the motion, which was passed by five to one in favour of demolishing the building but retaining its large concrete floor plate.
However, Coun Thompson continued to speak as Coun Cranney tried to move onto other items.
Coun Cranney chose to adjourn the meeting for five minutes.
Shouting between councillors and members of the public were heard as the meeting was halted.
The demolition work is set to cost £40,000 and is due to start on September 19.