The owners of Thain's Building at 1 Victoria Ave say they have no option but to strengthen or demolish but can't afford to do either.
But opponents of a consent application to demolish the Class B heritage building say losing the "priceless and irreplaceable" building would fundamentally change the entrance to the Avenue and set a precedent for the city's heritage stock.
A two-day hearing where independent commissioner Rob van Voorthuysen will consider the demolition application began on Thursday.
Agent Noel Mouldey, on behalf owner Tony Karantze, said it was a simple case of the owner not being able to afford the demolition or strengthening required by legislation.
"The owner can't afford to do that, they need to find somebody who can."
Mouldey said applying for help from the Government's Heritage EQUIP fund was not an option either.
It only funded up to 50 per cent of structural work and there were other refurbishment costs to consider on top of that, he said.
"Those other costs, when added in, are quite excessive.
"It has to make a return at the end of the day (and) even with the funding it was just impossible to make that return."
Mouldey argued the market spoke for itself with efforts to sell the building proving fruitless.
"No body has picked up the opportunity to come to the party to buy it and do something else with it."
Meanwhile, Karantze said insurance money paid out for 2015 flood repairs had been banked because he "didn't see the point" in doing the repairs.
Almost all of the 33 submitters are opposed to the demolition consent.
Sue Cooke said the building was "priceless and irreplaceable" and a core part of the Edwardian gateway to the city centre which had a cluster of heritage buildings.
"[It's] a precedent, I believe, as a community we cannot condone."
Cooke argued the application lacked evidence of the building being marketed thoroughly with only four advertisements submitted.
She believed the money spent on the application to demolish "would be better spent on maintenance and improvements to the building that would make it more appealing to prospective buyers and tenants".
It was also irresponsible not to make post-flood repairs and because the building had been given a rates holiday and the owners owed it to the community, she said.
Andra Bayly had some sympathy with heritage building owners but said the Thain's application was "appalling".
No resources had been spent investigating other options.
"I really feel it's incumbent on the owner to do that," Bayly said.
"This could have been a real test case for Whanganui if there had been a robust application."
A business case for the preservation of heritage buildings needed to be built as a community around what the current need is.
"Heritage is a very delicate balance between hanging on to the past but at the same time we can't just hang on to the past for the sake of it," she said.
"It would be great to have an understanding of how we're going to pull that together."
Architect Bruce Dickson from the Whanganui Regional Heritage Trust was also concerned the owner's consideration of future use - or even ownership structure - was limited.
"The outcome needs to be the building owner working together with other parts of the community to try to make this a success for everybody."
New Zealand Institute of Architects representative Elinor McDouall said demolition should be a last resort.
"We don't believe all options have been considered.
"There's been a real upsurge in the value of real estate in Whanganui and ... interest in heritage buildings and people taking them on."
The hearing continues on Friday with more submitters and the owner's right of reply.