Redcar and Cleveland Council is already stumping up £550,000 on the derelict Arlington Chapel in Loftus in the North York Moors, with money from the Tees Valley Combined Authority which has been used to take the property out of private ownership and demolish it.

The local authority has subsequently had to appoint legal counsel at a cost of £30,000 after a third party successfully sought a judicial review challenging the use of its powers to knock down the building, which is in a conservation area.

Last year ex-Teesville ward councillor Bob Norton, a former cabinet member for regeneration, wrote to Steve Newton, the council’s chief monitoring officer, labelling Arlington Chapel as a “vanity project”.

In an e-mail Mr Norton said residents had “just cause to question the process” and claimed due diligence by the council should have revealed the poor structural state of the building previously.

He questioned why the council had not had the building made safe or demolished at the former owner’s expense.

Mr Norton said during his time on the council the absence of a viable business plan and associated capital had been cited as a reason for the council not taking ownership of the chapel.

He wrote: “The indications are that the purchase of the Arlington building amounts to nothing short of a vanity project and that the signing-off of the expenditure is worthy of further investigation by the council auditors.”

The council previously told the Local Democracy Reporting Service it had paid £236,000 to release a charge against the former Methodist chapel and said it had been quoted just over £200,000 to demolish it, while a residual sum had been budgeted for to survey the condition of a neighbouring wall.

In a recently published delegated decision document it said it had engaged Kings Chambers for a six month period to provide legal advice for the High Court case.

The document said: “If the council is successful in defending [the] challenge they will request legal fees to be reimbursed from the challenging party.

“However, terms and payment structure are unknown at the present.”

Arlington Chapel was bought after being identified as a key plot for future potential development, as part of the Government-backed Future High Streets Fund project for Loftus.

A council spokesman said: “In late 2023 two independent structural assessments highlighted the derelict state of the building which posed the risk of collapse, potentially endangering the public and neighbouring properties.

“As a result, the council is demolishing the former chapel under the Dangerous Structures Section 78 of the Building Act 1984.

“The demolition of the former chapel is progressing well and is currently 75% complete.

“Sandstone from the structure is being stockpiled for reuse in other planned regeneration schemes in Loftus.

“A High Court hearing [considering] the legal challenge to demolish the building in a conservation area has taken place with the judgement due to be given at a later date.”

Council challenged in High Court over plans to demolish chapel and schoolhouse in Yorkshire village