Putting it in perspective, Trump the Developer wants to buy a property for his business and is told that he can't tear it down, cannot expand it, cannot remodel the interior without permission of the local government commission. Would Trump the Developer pay a premium for it knowing his ability to make money off it could be limited?
Who in their right mind would make that a Historical Site? That thing is an ugly semi brutalist architectural mess and security nightmare.
It needed to be razed and rebuilt or barring that find a new site and build a new one. Which is what they did.
Isn’t the embassy considered US territory? If so, then host country planning commissions would have no say.