The original, grade two listed, chalets were damaged - or had to be demolished on safety grounds – when the retaining wall collapsed in 2018.
Work to stabilise the wall started in 2020 and was completed last year.
It means the chalets can now be reinstated, which will significantly improve how the area looks and will complement the wider regeneration of South Cliff Gardens, which is ongoing.
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It is proposed that they are built to a higher standard than the originals and the installation of an electricity and water supply and drainage means they could offer much improved facilities.
Externally, the chalets would need to be very similar to the original block in order to meet conservation rules and secure support from organisations such as English Heritage.
This will require a specialist architect to design them.
Cabinet will be asked to consider three options for the chalets once they are built. They could be sold on the open market, retained and rented out or a combination of both.
If approved, the £383,000 would come from the council’s local investment fund.
Marc Cole, Scarborough Borough Council director, said:
“We’ve always had an ambition to reinstate the chalets lost when the wall collapsed.
“Work to fix that is now finished, so we have the opportunity to begin the reinstatement.
“The new chalets will be a considerable upgrade to the originals but will be carefully designed to meet conservation requirements and complement the area around the Clock Café.”