Portland city councilors may soon take the first step in a multiyear effort to move the city’s Department of Public Services out of Bayside.

Although no final decision has been made, at least one nonprofit group is angling to acquire one of the public works buildings that would be vacated in a neighborhood that’s poised to see tens of millions of dollars worth of development in the coming decade.

This week, two City Council panels – the Housing and Community Development Committee on Wednesday and the Finance Committee on Thursday – will consider leasing a warehouse at 212 Canco Road, with an option to buy the property in the future. If the lease is ultimately approved, the city would move its traffic, maintenance, emergency operations and some recreation staff to the building and vacate one of several public works buildings in Bayside.

The lease/purchase contract for the nearly 70,000-square-foot building would total $3.15 million.

Portland’s salt sheds and other public services garages would remain in the neighborhood for now, but would eventually be moved to other sites under the city’s long-term plan.

Greg Mitchell, the city’s economic development director, said it has been a longstanding goal of the council to move public services out of Bayside as the neighborhood makes the transition away from industrial use.

“With the real estate acquisition of 212 Canco Road, we will be able to meet that goal,” Mitchell said.

City Councilor Kevin Donoghue said relocating the city’s public services department is akin to relocating the scrapyards that once dominated Bayside. Such industrial uses are not in line with making Bayside a mixed-use neighborhood, he said.

The relocation of public services could allow the city to make Portland Street a focal point of redevelopment efforts in Bayside, Donoghue said.

“It’s just very well-situated,” he said. “It’s very close to downtown.”

Roughly 30 employees would move into the new Canco Road facility before the end of this fiscal year, if the lease is approved. Nine of those employees make up the city’s traffic division, which oversees the city’s streets and traffic management systems, and the other 21 employees are maintenance workers.

The proposal would free up a 7,130-square-foot brick building and a half acre of land at 65 Hanover St., which has a tax-assessment value of $403,000. A smaller, 3,324-square-foot building at 90 Anderson St. would be vacated in a few years.

There have been no public discussions about what to do with the buildings once the services are moved. However, Mitchell acknowledged that a nonprofit group is working behind the scenes to acquire the Hanover Street property to create a center for innovation and design.

“It’s an interesting concept that’s worth some more conversation,” Mitchell said.

Last August, Creative Portland, a quasi-municipal nonprofit created to promote Portland’s creative economy, announced a new initiative to make it easier for artists to find spaces to work and display their art.

The Creative Space initiative is being led by Tom Blackburn, the owner of Maine Construction Services and a member of the Creative Portland board of directors.

Blackburn said the group would like to partner with the city and educational institutions to establish a Portland Arts and Creative Enterprise, or PACE, Center for Innovation and Design in the public services building. “We’d like the city to invest the land and the buildings,” he said.

Blackburn said he’d like to use 65 Hanover St. as a high-tech center for gamers, computer programmers and sound recording. The center would provide recent graduates with access to state-of-the-art equipment that would be difficult for them to acquire on their own, he said.

If that venture is successful, Blackburn said, the group also would like to use the public services building at 86 Hanover St., a property known as the general store, as a low-tech center for woodworkers, welders, printmakers, and bike and auto repair workers.

Blackburn said the idea has been presented to neighborhood associations in Parkside, Bayside and the West End. Other meetings are planned in the coming weeks.

The city allocated $3.05 million in capital funds to begin relocating public services in fiscal year 2014, which ends June 30. Mitchell said the city would lease the Canco Road property for three years and then exercise its option to buy.

In a memo to the Housing and Community Development Committee, Mitchell said the city would pay $81,500 a year to lease the property. If the city purchases the property after three years, it would have to pay an additional $2.9 million.

The city plans to honor the leases of two businesses currently in the Canco Road property, Mitchell said. Those leases expire in 2018.

The city originally planned to move public services to city-owned land on Riverside Street, but Mitchell said Canco Road is a more central location.

Public Services Director Michael Bobinsky said the city’s heavy equipment storage and refueling center at 82 Hanover St. would remain in Bayside, as well as the Lower Garage at 86 Hanover St. and the administrative offices at 55 Portland St.

The long-term goal is to move most of these functions, too. Mitchell said the city will likely have to purchase more land to move the rest of public services, since there isn’t enough space on Canco Road.

Donoghue said there were several variables that could affect the final use of public services land in Bayside. The city is currently working on plans to extend Somerset Street and open up even more development possibilities, he said.

Donoghue said he is not surprised that Creative Space is promoting its vision to neighborhood leaders, but he stressed that the final decision would be up to the council.

“That discussion has not yet happened,” he said. “The decision-making process is very much in the city’s hands.”

Randy Billings can be contacted at 791-6346 or at:

rbillings@pressherald.com

Twitter: @randybillings