Norfolk Crescent dates back to the 1820s and is one of the most prominent buildings on Hayling Island's seafront.
But it has not been mentioned in the Hayling Seafront Masterplan, a blueprint for the future which includes proposals to build luxury flats, entertainment venues, a glass tower and a watersports academy on the island.
Hayling Island Residents' Association is demanding it be included.
Chairman Paul Fisher said: 'It's a very important and prominent part of our heritage. What a silly idea to try to improve the seafront and leave that an eyesore.
'If it were to be developed and upgraded it would look splendid and back to its former glory.'
The four-storey building was built as part of the vision of millionaire William Padwick, who wanted to emulate Regency-style homes in Brighton. But the flats have fallen into disrepair over the last two decades.
Many are owned by disgraced landlord Christopher Mincham and have had to be closed as they were considered unsafe to live in.
However, there is a glimmer of hope. Part of the block repossessed from Mr Mincham following his bankruptcy is now up for sale which could see it revamped, as reported in The News on Tuesday.
Council bosses said the masterplan was not a rigid scheme and was simply a set of ideas to entice developers to invest.
Hayling Councillor Andy Lenaghan said they would not rule out including Norfolk Crescent.
He said: 'Anything that falls within the central Beachlands area is part of the framework.
'These ideas put forward are not planning applications and unless we can attract developers and funding it won't happen anyway.'
He added: 'We have been trying for a long time to get investment in the crescent. It's going to be a difficult process because of all the ownership problems.'