Ruapehu's mayor wants the government to establish a special taskforce to help find a new owner for the Chateau Tongariro Hotel.
The famous central North Island hotel was shut in February last year, due to its high earthquake risk.
The New Zealand Herald has revealed plans by the Department of Conservation (DOC) to not go ahead with seeking expressions of interest for the site.
Ruapehu Mayor Weston Kirton wants a taskforce to facilitate discussions between key stakeholders, potential developers and investors.
Kirton said suggestions of decommissioning should not even be on DOC's radar while credible parties are willing to explore the opportunity the Chateau represents.
He told RNZ he believed there was interest in the building.
"We know that developers and investors are keen to invest in it, provided of course that they have a fair crack at a tenure that they can get a rate of return."
He said it was not fair on the community to hear through the media that DOC did not want to proceed with the expression of interest process.
More than 12,000 people have signed a petition the "Save the Chateau Petition" which will be presented to Parliament.