The factory, formerly Seafield Textile in Youghal’s Upper Strand, had planning permission for a retail development overruled by An Bord Pleanála last June.
Councillor Mary Linehan-Foley told the East Cork Municipal District monthly meeting the plant was now “a serious health and safety risk” after the most recent fire.
It emerged locals had to close their windows due to risks from the building’s asbestos roof.
The 20-acre site is bordered, on one side, by a small residential estate and, on the other side, by Perks amusement arcade, a car repair business and a recording studio.
Early this summer, an Bord Pleanála upheld an appeal for the second time against plans by a local consortium, Seafield Partnership, for a discount food store, adjoining retail units, and drive-through restaurant. The board ruled the proposal was contradictory to town centre development, two miles away.
“Now it’s a complete blight in a residential area and in a town striving to bring tourism to the Strand,” said Ms Linehan-Foley. “It’s a great pity an Bord Pleanála didn’t see the bigger picture.”
Residents say that, since the textile plant closed in 2005, there have been six fires started in the main building and one each in the front cottage and boiler room.
The most recent fire was started on Saturday less than a week after another blaze inside the building. Youghal fire brigade quickly controlled the flames.
Ms Linehan-Foley said: “There is real concern that a fire will start in the middle of the night or take hold before it is seen and local residents will end up being evacuated.”
Phil Tivy-Perks of Perks Amusements said locals “just wonder whether the place will ever be made presentable again. I can’t understand why they wouldn’t allow a supermarket there.”
A spokesman for Seafield Partnership has told Cork County Council they intend meeting shortly to discuss the site.