Property developers are furious after being denied an opportunity to convert two historic buildings owned by Birmingham City Council into flats.
Bidders claim they were prepared to pay up to £400,000 each for Hawthorn House and Milton Grange, both in Handsworth Wood.
But the buildings were suddenly withdrawn shortly before they were to be sold at auction to the highest bidder – and are set to instead go to local community groups.
The council has accepted an offer of about £200,000 for Milton Grange from a local community organisation and is reconsidering the future use of Hawthorn House, which was used as a library but had to close after maintenance costs soared.
It is possible that Hawthorn House will be sold to a residents group which has formed a trust and wants to run the building on a not-for-profit basis.
It hopes to take advantage of a Community Asset Transfer scheme, which helps councils sell property to local organisations.
If the transfer goes ahead, Hawthorn House could become a base for a variety of uses including a health centre and nursery.
But developers attending the auction at Villa Park were furious.
They claim the council, which set a guide price of only £250,000 for Hawthorn House, should be getting as much money as possible from selling assets.
Raj Singh, who was at the auction, had put together a consortium with friends and intended to bid for both properties.
Mr Singh said: “We would have been prepared to pay up to £400,000 for each one.
“Other people in the room were also very interested in buying both buildings and were very surprised when they were withdrawn without explanation.”
A council spokeswoman said: “We have released Milton Grange at market price to a community organisation which is providing a service much needed in the area. As the sale is not complete we cannot give details of the price and buyer.”
She said Hawthorn House was withdrawn from auction because the council wanted to review its potential future use.