The Futurist Theatre is to be put on the market to encourage bids for the closed entertainment venue.
Campaigners have welcomed the decision to split the site development into two phases, which they believe gives the theatre more chance of being saved.
The council will put the ‘Lower Tier’ of the development, The Futurist, the Futurist flats and the old Mermaid public house, out for bids, with the ‘Upper Tier, the town hall and King Street car park, being marketed at a later date.
The decision was taken to seek informal tenders – a non-binding bidding process – at the council’s cabinet meeting on Tuesday.
The Joint Venture Board, which is overseeing the redevelopment of the area, also said that in the light of a 6,600-signature petition calling for the retention of the Futurist being submitted, it would listen to bids that sought to keep and restore the theatre.
Cllr Janet Jefferson, who made a plea to the council last week on behalf of the residents who signed the petition, said it was great news that the process had been split.
She told the Scarborough News: “It means that people who want to keep the Futurist now do not have to worry about coming up with a bid or business plan for the whole site and can just concentrate on the Futurist.
“It means someone could come in with a plan to restore the theatre, which is what the 6,600 people who signed the petition wanted.
“It is good that the Joint Venture Board has listened.”
If the process goes to plan, and the results of two outstanding surveys are received in good time, it is likely that the council will start considering bids at a meeting in September.
A 250-year lease on the site will be entered into to ensure the council retains control of the area.