The bill to bring Priory Hall in Dublin up to standard will cost €27m, €17m more than was originally envisaged.
It had been thought the fire-trap apartment would be demolished, but last year the City Council committed to refurbishing it at a cost of €10m.
Redevelopment has begun but has revealed a string of problems - including the removal of pyrite - which is pushing up the cost of the project.
Property owned by rogue developer Tom McFeely will be used to offset some of the cost.