Community groups are being given the chance to take over Foredown Tower, a disused water tower on the outskirts of Portslade.
The tower is available after Hove and Adur Sea Cadets this week dropped plans to take over the venue as their headquarters.
It was also to have served as a gateway centre for the new South Downs National Park, offering a café and bike hire.
However, the group said that the recession had put paid to the plan, making it no longer financially viable.
The cadet unit has also found a possible alternative venue which could be easier and less costly to convert.
Foredown Tower houses a camera obscura, which projects images of the surrounding city and downland inside the building.
Brighton and Hove City Council cabinet member for culture David Smith said: “We’re looking to getting a community group or other organisation in there which can help pay for it.
“We would also plan to speak to the national park authority about it.
“It could make a wonderful HQ for someone, giving great access to both the city and the countryside.”
Sea cadet unit chairman Ian Wright said: “When we started, our business plan was based upon a buoyant economy.
“As a result, our business plan, which was based on a large number of visitors and a high level of spending by them, is no longer valid.
“The opportunities for securing funds for improvements from grant-giving bodies have also diminished. So taking on the tower would be too great a risk for us.”
The tower, lately run by the council as a countryside and astronomy centre, is currently closed pending the outcome of the negotiations.
