Oyston Mill in Preston has failed to sell after being put up for auction today with a starting bid of £2.9m.
It was withdrawn from the sale, held at Blackpool Football Club, after a highest bid of £1.2m, which fell short of the reserve price which was not revealed.
The property on Strand Road in Preston is currently home to several businesses including a model shop, fireplaces, gym and picture framing firms.
Plans, submitted by Denwis Ltd, of which owner Owen Oyston is a director, to convert the property to student accommodation with 256 bedrooms, a 96-space car park, communal areas, a café, gym, and reception area, as well as external alterations, were approved by Preston City Council last month.
On Monday, the Oyston family was told pay Valeri Belokon £31.2m after a judge found in the Latvian's favour following a bitter High Court battle.
Justice Marcus Smith found they had acted improperly in relation to their running of Blackpool Football Club.