Fruition Property Developments is seeking planning permission to convert the former Bean cars head office in Hall Street, Dudley, into 24 flats.
However, the council's environmental services team said described the plan's sound-proofing measures to protect tenants from noise as "inadequate".
Bean House was built circa 1906 and served as the headquarters of the Bean motor works from 1919 to 1931.
It was later used as a textile works, but this ceased in 1997, and has been largely unoccupied over the past 25 years.
A report to the council's development control committee said the neighbouring Alan Nuttall works bought the building in 2006 with a view to using it as offices and an archive, but this proved not to be viable.
Fruition plans to convert the building into 24 apartments, including two studio flats, which will be put on the rental market.
The developer said in its application: "Although the building is of historical importance it has very little architectural merit."
It said the building's only notable features, a stone entrance, stairs off the foyer and a landing window, which would all be refurbished.
The statement, from Sedgley-based architect Complete Design on behalf of the developer, said the building was in need of complete refurbishment.
"The refurbishment would repair defective elements to prevent further decay and return to the local area a renovated building of local historical importance," it said.
"It has been proved by the simple fact that refurbishing the building to permit use as a factory or offices does not make economic sense.
"The proposed conversion to dwellings as detailed would improve the area and assist in the regeneration of this area of Dudley, close to the town centre."
A report by Dudley Council's environmental team said the authority and the developer had failed to reach an agreement on the methodology for measuring noise coming from the Alan Nuttall works next door.
"The currently proposed mitigation measures are inadequate and based on inappropriate standards," said a report by the council.
"It has not been demonstrated that sufficient mitigation will be provided to adequately protect future residents against the adverse effects of noise from the operation of the wood waste extraction plant at Alan Nuttall."
Bean cars' roots lay in the A Harper & Sons foundry established by Absolom Harper in 1822.
George Bean married Harper's grand-daughter, and became the company's largest shareholder in 1901.
He turned to car making at the end of the First World War, opening up a chassis works in Hurst Lane, Tipton. Chassis were then driven up to Dudley where the cars were completed.
From 1927 the company ceased car production to focus on trucks, but hit financial difficulties in 1931.
After that, it focused on producing components for other car manufacturers, eventually being swallowed up by the British Leyland empire.