SOUTH PORTLAND – City officials are exploring the possibility of buying a commercial property near City Hall for an expansion of the municipal complex.

The property at 148 Ocean St. is behind City Hall and the post office on Cottage Road. The property, a 7,100-square-foot building on one-third of an acre, is adjacent to city parking areas behind City Hall and next to the Assessor’s Office.

Mayor Rosemarie De Angelis said Thursday that the building suffers from “deferred maintenance,” but the property’s location in relation to City Hall warrants consideration by the City Council.

“We need to do a little more long-range thinking,” she said.

The property is listed for sale at $499,000 — a price that De Angelis said the city would not be willing to pay.

In the short term, tenants would be able to stay in the building, and the city could use empty areas as overflow space, De Angelis said.

The building, which has two vacant spaces totaling 1,560 square feet, now generates income of almost $40,000 a year, according to information from the broker, CBRE/The Boulos Co. The owner and anchor tenant, the Riverview Foundation, would have a five-year lease.

City councilors have ranked City Hall as the No. 2 priority for municipal improvement projects, behind a public works facility that’s expected to cost $8 million.

Part of City Hall was built in 1880, and an addition was built in 1979. Its problems include structural issues, mold, leaks, high maintenance costs and a lack of space.

The City Council considered possibilities for improving City Hall last year, but discussions tapered off as the proposed $47.3 million renovation of South Portland High School — approved by voters in November — became the focus for school and municipal officials.

South Portland has been interested in 148 Ocean St. in the past. In 2005, during a previous round of discussions about a municipal complex, city officials approached the Riverview Foundation, a martial arts and wilderness programs school, about the possibility of a sale. Other priorities overtook that project.

Councilor Maxine Beecher expressed concern about the cost of maintaining the building, which was built in 1940, and the city acting as a landlord.

Councilor Tom Coward said he generally wouldn’t support the city buying property as an investment or being a landlord, but 148 Ocean St. warrants exploration because it could be in the city’s best interest to buy it.

“If this were a commercial building not near City Hall, as far as I’m concerned, the city would have no interest in it,” he said.

City Manager Jim Gailey is working to schedule a tour of the building for councilors.

Staff Writer Ann S. Kim can be contacted at 791-6383 or at:

akim@pressherald.com