Preston Council stands to lose almost £400,000 in income with the closure of the city’s Market Hall and car park.
The building and car park are earmarked for demolition, meaning the authority expects to lose £378,000 by 2018/19, with the loss of parking fees.
Town Hall bosses have also warned that more than £1.2m could be taken away for the same year by Lancashire County Council, who currently have a cost sharing agreement regarding waste management.
Speaking ahead of last night’s cabinet meeting on the budget, Coun Martyn Rawlinson, cabinet member for resources, explained the losses the council is facing.
He said: “It is the financial forecast so nothing is for certain yet, but there are a couple of major things that may happen.
“One of them is the probable closure and demolition of the market hall car park which was earning money from people paying to park, so we have factored the loss of that income into the forecast.
“Depending on what happens on the market site, we could get some income back but we are not banking on it.”
A waste management cost sharing agreement with Lancashire County Council is also due to come to an end within the forecast, resulting in a loss of £1,271,000 in 2018/19.
Coun Rawlinson said: “We are still in negotiations with the county over this and it’s not for about three years, but we’ve taken the money out of the forecast.”
County Coun David Borrow, deputy leader at LCC, said it was agreed in 2013 that cost sharing agreements with district councils would only run for four more years, and said the county council had offered to fund a study looking at local councils working together to save costs.