Societies' values, cultural variety, and physical and intangible legacy are all being lost as a result of globalization, so, it is important to investigate how progress and legacy interact. Egypt has such a great legacy including the historical buildings that are considered to be a real gift. Unfortunately, most projects that aim at keeping those buildings were undertaken in the wrong way without adding real value. Those projects resulted in distorting the historical buildings. Mansoura City is considered one of the most beautiful cities in Egypt. It has such a great location on the river Nile, also it has a great number of historical buildings. All these buildings suffer from negligence and distortion. Although modern architecture has its features, it lacks the essence of Egyptian legacy. Rehabilitation allows the reutilizing of old depleted structures by assigning them new functions using new materials, and technologies, and introducing contemporary solutions to the historical buildings, without damaging their historical identity. By applying sustainable development opportunities and considering the requirements, the interrelationships between the historic areas and the urban context will achieve sustainable tourism and a conservation action plan for the historic surroundings of the Khedive Ismail palace, which has been considered one of the featured historical buildings in Mansoura city. The paper aims to provide steps or guidelines to achieve sustainable development of the rehabilitated building and improve the economic state through processes of rehabilitation of the building by using modern building technology and adding sophisticated elements that did not initially exist at the time of construction, and its architectural style. Examples of such features include smart systems technology and building management system, which can significantly contribute to the success of the building's economic rehabilitation and renovation.