PORTLAND, Maine — The Portland City Council on Monday night approved a plan to consolidate divisions of its public services, fire and recreation departments under one roof in a building to be purchased for nearly $3 million on Canco Road.

In addition to reducing the municipal government’s footprint, the strategy will free up for sale a city building at 65 Hanover St. in the Bayside neighborhood, where a proposed $150-million development nearby could increase demand in the market.

“I think this is a great opportunity not only for several different city divisions, which will be placed in a more advantageous location … [but] this will allow us to continue a lot of that positive momentum to continue to revitalize that Portland Street area,” said City Councilor Kevin Donoghue.

The plan calls for the city to spend a total of $230,000 leasing space in a 68,000-square-foot building, set on 4.2 acres of land, at 212 Canco Road for three years.

“It represents an unusually central location from a service delivery standpoint,” city Economic Development Director Gregory Mitchell told the council Monday night.

On March 1, 2017, the city will have the option to purchase the property for $2.9 million — an amount greater than the current market appraisal of more than $2.74 million, but lower than the city’s assessed value of nearly $3.1 million, according to a memo distributed to city councilors by Mitchell and Finance Director Ellen Sanborn.

The city of Portland already leases space at 212 Canco Road for portions of its fire and emergency response department, and under the three-year lease deal will move part of its traffic and trades divisions over from the now-more-marketable 65 Hanover St. site.

However, the city would need to share space in the Canco Road building in the short-term with private tenants Webber Supply and Unified Technologies, which have leases to occupy a combined 45 percent of the facility until 2018. If the city exercises its purchase option in 2017, it would give the tenants about a year to find new homes and make room for more city departments to fill out the space.

In the plan under consideration by the council, the city’s Emergency Operations Center and school trades division would move to Canco Road in 2018 from their current homes at Portland Arts and Technology High School, which will free up space there for the expansion of the popular Casco Bay High School expeditionary learning program.

Also moving to Canco Road would be the city’s playground maintenance and irrigation crews, which are currently housed at a 90 Anderson St. facility, and recreation department staff who now hold down space at the Portland Expo and Cummings Center, respectively.

“This is a significant move for the city,” Mayor Michael Brennan said.

Mitchell, Sanborn and the council’s Finance Committee, which approved the plan unanimously, are recommending to the larger council it use revenues from the sale of the to-be-vacated 65 Hanover St. property to cover the three years of lease payments.

The Hanover Street property is not far from where the proposed $150-million, three-tower, two-parking-garage Midtown project would be located. The $50-million first phase of that development was granted approval by the city’s Planning Board in January, but that approval was challenged by project opponents in a Superior Court lawsuit filed last month.

The cost to purchase the Canco Road property could be covered by a $3.05 million bond authorized by the council in September, when Mitchell and City Manager Mark Rees announced they needed financial flexibility for a consolidation effort, but were not yet ready to release potential sale details or property sites for the move.

Seth Koenig

Seth has nearly a decade of professional journalism experience and writes about the greater Portland region.