Gardai are investigating an arson attack on the premises at Ludden, Buncrana, late last Thursday night.
Businessmann Peter Casey was developing the premises as a refugee centre for Ukrainians.
Furious former presidential candidate Mr Casey described it as a “senseless and futile” act.
“I’m so angry and so annoyed.”
“This is wrong on so many levels. It’s just so frustrating.”
He said the fire, which came a day before an arson attack at a refugee camp in Dublin, has caused substantial damage.
“They broke into the building and used diesel to set fire to the inside of it. It was very badly damaged. All I have seen so far are videos but it looks pretty extensive.”
Speaking from the United States yesterday evening, Mr Casey concedes that his plan for a refugee centre here is now in jeopardy.
Mr Casey, who lives in Greencastle, also revealed that he has initiated legal proceedings for defamation against a named individual from Buncrana.
He said the action follows alleged defamatory comments on Facebook.