Decision on Scarborough town hall move delayed until July
A proposal to relocate Scarborough's town hall will be put out to public consultation.
Plans to relocate 340 office workers to an out-of-town office and redevelop the site will be available for comment until July.
The town's chamber of trade said the move would be "devastating" for shops.
But, the council said moving to a "fit-for-purpose" site would save more than £7m on future maintenance and IT costs.
Chris Golder, chairman of Scarborough and District Chamber of Trade and Commerce, said the organisation supported new investment in the town, but the proposed move would affect businesses in the town centre.
"The vibrancy of our town centre relies on having offices there," he said.
"Consider the loss of more than 340 people who regularly shop, use cafes, pubs, restaurants, banks and so on, all year round. The effect on Scarborough town centre could be disastrous."
Scarborough Borough Council said the current town hall "is not suited to modern working," and said the move to a new site would "free up the existing site for redevelopment as part of the wider regeneration of the town centre and seafront".
The £3m cost of the building would be paid for by the the Homes and Communities Agency (HCA), the government-funded national housing and regeneration agency for England.
In return, the HCA would get a stake in any redevelopment of the town hall site.
A report drawn up by the council's chief executive and head of finance said the relocationwould have "little quantitative material impact" on the economy, with staff at the town hall currently "contributing just 0.6 per cent of the total retail turnover of the town centre."