Scarborough Borough Council has confirmed it is planning to now sell the former Royal Albert Drive Cafe site.
The cafe and toilets were demolished in March with Scarborough Borough Council hoping to increase the size of the plot of land in a bid to attract more developers to submit offers.
It now appears a buyer may have been found after the council sent out a notice to residents confirming it is proposing to sell the land.
The council is now asking for any objections or representations about the proposed sale to be sent by writing to director Nick Edwards before the deadline of Monday October 2.
It is understood the council wants holiday lets included as part of any development on the Royal Albert Drive site.
The Scarborough News is aware of two applications by developers for the site which were rejected for reasons unknown.
Richard Ward shared plans to transform the cafe into a restaurant specialising in locally caught seafood last year on behalf of an investment group.
Ben Stonehouse also paid thousands of pounds for plans to be drawn up for his £2million development that included eight holiday apartments, three penthouses and five two-bedroom, three retail shops, two restaurants, a toilet block and the renovated Sea King helicopter used as a cafe on the roof.
Martin Pedley, Scarborough Borough Council asset and risk manager said: “It is not appropriate for us to comment on why individual bids have not been successful.”
The demolition of the toilets at the Royal Albert Drive cafe site left no public loos between Peasholm and Luna Park, causing anger among residents.
Residents can view the notice at http://bit.ly/2frTZu