Dublin City Council (DCC) will need to inject another €1.7m into the former Longfield's hotel to turn it into a homeless hostel.
If the council sticks to its budget, almost €9m will have been spent on the project over eight years.
The hotel was purchased by the local authority in 2007 for €6.7m. It is planned to refurbish it into a hostel with space for some 30 men, to be run by Dublin Simon. The charity needs to replace its hostel on Harcourt Street.
DCC purchased the hotel from Priory Hall developer Tom McFeely and the cost of acquiring the property was paid by the Department of the Environment.
Since its purchase, the council has shelled out more than €530,000 on maintenance and security on the Fitzwilliam Street building.
The spend on maintaining the building fluctuates widely - some years it has cost the council less than €500 while in 2008 it cost nearly €200,000.
Emergency works also had to be carried out on the building this winter to weather-proof it but the council declined to say how much this cost due to "commercial sensitivity".
Fine Gael councillor Paddy McCartan described the spend on the hostel as "throwing good money after bad" because it won't add any extra beds to tackle the homelessness crisis.
Mr McCartan requested details on the project from council executives and said he feels his colleagues voted for the hostel revamp as a worthy project, but that it was time to call a day on the expensive project.
"It doesn't take one person off the list of homeless people. The money may be better spent providing modular homes," he said.
Another solution tabled by the local representative was to sell the property.
"On a bad day you could get €5m for it," he said.
Both local residents and members the Irish Georgian Society raised concerns about the hostel plans.
A local businessman has sought a judicial review of the proposal to use the building as a hostel because he feels that the council should be subject to a more stringent planning process.
The hotel was selected in a bid to spread homeless accommodation evenly across the city.