Management at Kerry County Council (KCC) is reviewing the scope of the Áras Phádraig project.
Plans were first unveiled to redevelop the now-derelict site on Lewis Road in 2021, but councillors in the Killarney Municipal District (MD) rejected the latest plans for the site last July after public dissatisfaction.
Cathaoirleach of Killarney MD, Martin Grady requested an update on the redevelopment of Áras Phádraig.
He was told that the council is liaising with Department of Housing, Local Government and Heritage regarding the Urban Regeneration and Development Fund (URDF).
This funding is no longer guaranteed since the previous plan was rejected, and management must now submit a revised business case for the former Franciscan Friars site.