Council put Habershon House on the market
The authority warned earlier this year that it would look to offload the house, which has seen a sharp decline in visitors.
Deputy leader Cllr Gordon Watson said: “We are still hopeful we can secure its future use by way of a community asset transfer, but we are not in a secure position with this option.
“We have been in talks with many potential people and there is still a possible positive outcome, but we need to explore all options to achieve value for money.
“Because of ongoing budget pressures the council must now pursue both potential options either for sale of the building or for community asset transfer.”
Habershon House is valued at between £150,000 and £175,000.
A revamp — improving facilities and adding internet access — would cost nearly £20,000, the council has estimated.
The advert offering the three-storey home for sale lists potential future uses as a nursing home, residential school, college or training centre.
A report in the summer forecasted a £22,000 loss at Habershon House this year but said the council’s other holiday hostel, at Crowden, Derbyshire, was expected to cover its own £147,000 running costs.
Schools are said to prefer to activity centres away from the coast and in bigger groups than Habershon’s 42 capacity.
More than 2,200 people signed a petition to save the home when a sell-off was broached by council bosses in 2015.