A leading Carlisle councillor is "hopeful" that the authority can claw back the money the authority has been forced to spend on the Carlisle Central Plaza.
The city council has spent between £1.5 and £2m on the crumbling eyesore including footing the bill for the demolition, but it does not own the land.
Part of the city centre has been shut down for months after it was feared the former Grade II-listed building would collapse.
The road closures have been causing huge problems for businesses, though some traders have now returned as demolition works continue to progress ahead of schedule.
Bulldozers were brought in after much of the hotel's internal structure fell away, with the £1.3m demolition getting underway in November.
A pile of rubble is all that remains now of the former landmark.
Because the site is ownerless, it fell to the district authority to ensure the building's safety under emergency planning rules, leaving the council with a huge financial headache.
But speaking ahead of a report due to be presented to full council in January, deputy leader Gareth Ellis revealed that he was optimistic about the prospect of recouping the money.
Under the plans, 100 per cent of the cash spent by the council on the Central Plaza would be repaid through a charge against the cost of the works before it can be transferred to a buyer.
He said: "What we have done is put a charge in the site, which would be passed on to any future purchaser. Every time we carry out work, we add that charge to the cost of the site.
"It's not unreasonable for the council to expect to get back money it has spent on this, but we haven't budgeted for that."
But for now, the most urgent business for the council remains to get the site cleared, full access restored and the businesses trading again.
The city council has also been lobbying Government for financial help but the ministers have told the authority that it is their responsibility to foot the bill.
Whitehall has also pointed out that they are spending a huge amount of money in the area of Carlisle around the Viaduct through the Borderlands Growth Deal which is due to breathe new life into the nearby railway station and Citadel.
The former hotel closed in 2004, with the site being held by the Crown Estate, though the council is still responsible for it.
Members of Carlisle City Council are due to consider a report setting out the sequence of events leading to the programme of emergency works undertaken to demolish building at their next full council meeting,
The report also provides a detailed breakdown of the demolition works and their associated costs, with the 2019/20 Capital Programme increased by up to £1.35million to fund the emergency works,