Hahnemann University Hospital could hold 500 patients with the coronavirus. But city officials said the cost was too steep.

A hospital with room for nearly 500 beds has been closed for months in the center of Philadelphia, a city bracing for the spread of the coronavirus and a crush of sick patients.

But the facility will remain empty, city officials said, because they cannot accept the owner’s offer: buy the hospital or lease it for almost $1 million a month, including utilities and other costs.

“We don’t have the need to own it nor the resources to buy it. So we are done and we are moving on,” Mayor Jim Kenney told reporters on Thursday during the city’s daily briefing.

The next day, he said that Temple University would let the city use a music and sports venue for free. The city would no longer pursue the closed facility, Hahnemann University Hospital.

The abrupt end of the dispute underscored the frantic search for more hospital beds as cities try to prepare for a crisis that is overwhelming medical facilities in New York, and highlighted the tensions between government officials and businesses in responding to the pandemic. This week, the Trump administration backed away from announcing a $1 billion deal with General Motors and Ventec Life Systems to produce ventilators, after officials said they needed more time to assess the estimated cost.

In Philadelphia, coronavirus infections are quickly rising. On Friday, the city health commissioner, Dr. Thomas Farley, reported 154 new cases, for a total of 637 cases across every ZIP code of the city, and three deaths. “This virus is everywhere in Philadelphia,” he said.

The owner of the hospital, Joel Freedman of Broad Street Healthcare Properties, a real estate company, said he had offered to sell the facility to the city well below market price, or to lease it for $60 a bed a day, far less than what two other hospitals in California agreed to charge to lease their facilities.

“Anyone looking at the apples-to-apples comparison can see that Mr. Freedman not only desired to be helpful to the city of Philadelphia and its leaders, but he was very reasonable,” said Sam Singer, a spokesman for Mr. Freedman, who is based in Los Angeles. “We’re disappointed that they didn’t accept what we offered, but we stand ready to be helpful to the city or the state if they want to reopen discussions.”

Hahnemann Hospital, which once served the city’s poorest patients, closed in September 2019. The hospital had been suffering millions of dollars in losses a month, Mr. Freedman told The Philadelphia Business Journal last June.

“We relentlessly pursued numerous strategic options to keep Hahnemann in operation, and have been uncompromising in our commitment to our staff, patients and community,” Mr. Freedman said at the time. “We are faced with the heartbreaking reality that Hahnemann cannot continue to lose millions of dollars each month and remain in business.”

The decision to close the hospital last year infuriated local leaders and led Senator Bernie Sanders, the Vermont independent running to be the Democratic nominee for president, to hold a rally outside the hospital. He described the closure as a consequence of greed, and an example of the need for a better health care system.

Mr. Singer said Mr. Freedman had been unfairly maligned throughout the recent dispute, and that his obligations included maintenance, compensating his staff and paying off the loan he took out to buy the property.

“They’ve wrongly been critical of Mr. Freedman,” Mr. Singer said of his detractors. “We understand that emotions are high. We don’t want in any way to hold that against them.”

He added, “Even with those harsh words, our doors, our ears, our minds are still open. We want to help.”

Since last fall, the hospital has sat empty and fallen into disrepair, Mayor Kenney said on Thursday. “It has no beds and would require extensive work to make it usable again,” he said.

Mr. Kenney said the city had offered to lease the hospital for a “nominal” amount and pay for its maintenance and expenses, a deal that would have meant “hundreds of thousands of dollars a month” for Mr. Freedman and made the property more marketable in the future.

“Yet the owner would not agree to our offer,” he said.

Instead, Mr. Freedman wanted the city to pay $400,000 a month in rent in addition to making improvements and paying for other expenses, Mr. Kenney said. “I’ll let others decide whether that’s reasonable or not,” Mr. Kenney said.

Mr. Singer said the city contacted Mr. Freedman around March 11 about leasing the property. “We responded immediately and said, ‘Yes, we would like to help in any manner,’” he said.

Mr. Freedman offered to sell the property below market price or lease it for $27 a bed a day. The city would have to pay an additional $33 a bed a day to cover the costs of utilities and taxes, he said. The full amount came to about $910,000 a month, Mr. Singer said.

“They just decided, ‘We’re not going to pursue Hahnemann,’” he said.

City officials had signaled that negotiations were breaking down earlier this week. On Tuesday, the city’s managing director, Brian Abernathy, told reporters that what Mr. Freedman wanted was “unreasonable.”

“I think he’s looking at this as a business transaction rather than providing an imminent and important aid to the city and our residents,” Mr. Abernathy said.

City Councilor Helen Gym said on Twitter that day that Philadelphia should not let “unconscionable greed to get in the way of saving lives,” and called for acquiring the property through eminent domain. Mr. Kenny said city officials had explored that option but determined it was too time-consuming and would require them to purchase the building at market price.

Mr. Kenney said in a news conference Friday that the city would use the Liacouras Center, a concert and sports venue at Temple University, for additional hospital space. The university will let the center be used for free and the space can fit up to 250 beds, officials said.