The proposals for Crescent Gardens - which has sat empty for five years - include a two-storey extension, rooftop restaurant, gym and new office space.
The plans have been recommended for approval at a meeting on 10 May after the council's planning department released a report saying the redevelopment would "increase the vitality of this town centre site and prove beneficial in boosting Harrogate’s economy."
Harrogate-based property developers Impala Estates are behind the proposals after purchasing the building for £4 million in 2020.
This came after the council moved to its new Knapping Mount headquarters in 2017.
At the time, the council announced it would sell Crescent Gardens to property developer Adam Thorpe who had plans for a £75 million redevelopment including luxury apartments, an art gallery, underground car park, swimming pool and restaurant.
But two years later, Mr Thorpe’s company ATP Ltd fell into administration with debts of almost £11 million, including £24,394 owed to the council.
Crescent Gardens then went back up for sale and was eventually bought by Impala Estates.
In the report to next Tuesday's meeting, the council's planning department said the latest plans from Impala Estates would "alter the locality but on balance are considered acceptable."
An objection against the plans was made by Historic England which questioned the public benefits and said the roof extension should not exceed one storey.
The body also said the plans relate "very poorly" to the existing building.
However, the council has argued this view contradicts a previous assessment from Historic England's predecessor body, English Heritage, which described the building as "poorly proportioned in classical terms" because it was originally restricted to two storeys.
These comments came when English Heritage refused listed status for the building in 2002.
Meanwhile, the latest proposals have already won the support of Harrogate Civic Society which described the scheme as "excellent".
The civic society previously said: “The existing roof lends itself to a two-storey extension, something that was advocated many times to Harrogate Borough Council, making use of the original design that envisaged future extensions at roof level.
“We are pleased to see that the building will be retained and refurbished as offices, with a restaurant on the roof and meeting rooms within the historic core, as this will retain a degree of public access and use of the building."
By Jacob Webster, Local Democracy Reporter