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The auction was promoting a “once in a lifetime” experience in Atlantic City, N.J., that would raise money for a youth charity: the right to push a button to implode the vacant Trump Plaza Hotel and Casino.

But the auction, which had drawn a high bid of $175,000, was canceled after objection from the building’s owner, a subsidiary controlled by a company run by Carl C. Icahn, a billionaire investor who has supported President Trump, the auction house overseeing the bidding announced on Tuesday.

The proceeds would have gone to the Boys & Girls Club of Atlantic City.

The auction house, Bodnar’s Auction, said in a notice on its website on Tuesday that the Icahn subsidiary “was not on board with the situation and would in no way participate or help facilitate, citing safety issues.”

A spokesman for Icahn Enterprises declined to answer questions about the specific concerns. He said that one of Mr. Icahn’s foundations would donate $175,000 to the Boys & Girls Club “to replace the auction proceeds that they would have purportedly received.”

But Stephanie Koch, the chief executive of the club, said on Tuesday morning that she had not received any notice about a donation.

“There has not been any communication with Icahn at this point,” she said.

The property opened as Harrah’s at Trump Plaza in 1984. It was one of three casinos Mr. Trump would come to control in Atlantic City that employed thousands of workers and brought in hefty gambling revenues. The casinos would help define Atlantic City as a vital center for gambling outside of Las Vegas.

But over the years, casinos in other nearby states — including Pennsylvania, Delaware, Maryland and New York — drew business away from Atlantic City.

The waterfront Trump Plaza Hotel and Casino closed in 2014 as Mr. Trump’s casino businesses foundered and the building had fallen into disrepair.

At one point, there were 13 casinos in Atlantic City. Today, there are nine. With sports betting legal, the remaining casinos have tried to reinvent themselves in recent years.

Their shuttering during the early days of the coronavirus crisis dealt the city a significant blow, putting 27,000 workers out of work before a cautious reopening. An analysis by the Brookings Institution about the pandemic’s blow to metropolitan areas nationwide in March found that the economy of Atlantic City could be the third hardest-hit in the country.

The Trump Plaza property had become a dangerous eyesore sitting on prime land for development. The mayor of Atlantic City, Marty Small, said it was deemed an “imminent hazard” in the spring and slated for demolition.

Mr. Small, a Democrat, announced the plan to demolish the building and to raise money for the Boys & Girls Club through an auction in December.

“Some of Atlantic City’s iconic moments happened there, but on his way out, Donald Trump openly mocked Atlantic City, saying he made a lot of money and then got out,” Mr. Small, a Democrat, said in December, according to The Associated Press. “I wanted to use the demolition of this place to raise money for charity.”

In an interview on Tuesday, Mr. Small said the city had not gotten explicit approval from the building owner for the auction plan. But he said he had moved forward anyway with the event, hoping it would generate $1 million for the Boys & Girls Club.

Joseph Bodnar, the owner of Bodner’s Auction, said after the mayor’s office proposed the plan, he felt had the “green light to go ahead and move forward.” Bidding opened three weeks ago and was set to close on Tuesday afternoon.

But days after the sale went live, lawyers for the Icahn subsidiary objected. Mr. Bodnar said he had been exchanging messages with the lawyers for weeks “trying to come to some kind of resolution,” before they sent him a cease-and-desist letter.

“That’s what led to us taking it off the auction block,” he said.

Mr. Small said he respected the need for a change of plans related to concerns about safety. He said the city was mainly focused on working with the owner to clean and redevelop the site.

“When you had chunks of concrete falling — sheet metal — that’s dangerous no matter whose name is on the building,” Mr. Small said.

A demolition date has not been set, Mr. Small said, but he expects it to be sometime in February.

Mr. Bodnar said he expected to move forward with a new plan to auction off the chance to witness the casino’s implosion, but details were not immediately available.

“I envision it as a red carpet event, where you will get a nice stay in one of the casinos,” he said.

Ms. Koch, who said she had not been involved with the development of the auction plan, said the Boys & Girls club needed the funds.

Before the pandemic, the organization had been focused on after-school programs. But over the past several months, it had expanded services to provide space for students to attend virtual school and get meals and study help throughout the day.

“In order for us to sustain our basically tripled programming, that funding is critical,” she said.

Tracey Tully contributed reporting.