At the Tuesday, March 9, Lancaster City Council meeting, Mayor Rick Gray announced the City’s final purchase of a building at 38 East Marion Street for $259,000. The property, on the same block as City Hall, could one day house an annex space to consolidate city government offices, Gray said.

Previous owners Mike Geesey and Tom Ponessa purchased the building last year for $260,000 to expand their popular downtown bar, Marion Court. Not long later, they were notified that the City was seeking to obtain the property. According to an Intell report last year, the owners specifically requested the City’s use of eminent domain to offset penalties for early repayment of a loan on the building.

“It would not be fair to keep the current property owners on hold any longer,” Gray said at Tuesday’s meeting.

Gray also emphasized that the City has no plans to begin developing the annex anytime soon: “While we are not in a position to move forward with construction of an annex to City Hall in the near future,” Gray said, “It is in the long term best interests of the City to control this property in order to enable future expansion.”

The $259,000, Gray said, is drawn from the City’s capital improvement program, funded by a 2007 bond issue. “Funds from bond issues can only be spent on capital projects which represent long-term investments by the City,” Gray said, with an eye on the City’s strained operating budget, “Bond funds cannot be spent on annual operating, salary, or benefit expenses.”

Gray presented a proposal last year to eventually expand City Hall into the annex property in a construction project that would cost an estimated $8 million.