Ledyard — Councilors on the Finance and Land Use subcommittees recommended this week that the Gales Ferry Landing property on Hurlbutt Road eventually be put up for sale.

At meetings on Tuesday and Wednesday night, both subcommittees recommended that the mayor put out a request for proposals to purchase the property. If no deal is reached, councilors recommended listing the property for sale. The request will now go to the full Town Council.

The former school property has served as commercial space for area businesses as well as a business incubator for local start-up companies since 2013.

It passed to the town in 2001 when the new elementary school opened on Route 12, and part of the parcel was sold to develop a CVS Pharmacy in 2011. Currently the land and building are valued at $582,260.

The town has issued requests for proposals at least twice in the past. In 2007, the town approved a purchase and sale agreement for the property with developer Cefalu, which wanted to build a pharmacy and medical facility. Officials at the time had hoped the facility would be a catalyst for future development. However, the deal eventually fell through.

Selling the building was one of the immediate recommendations of the Committee to Transform the Budget Process final report issued in October, which sought to examine potential savings.

Councilors at both meetings also emphasized the looming need for a roof replacement on the building, which would cost around $150,000, as one of the primary reasons to sell the building.

"We've talked many times about adding a roof on it (and) at some point this building becomes a liability for the town," Councilor William Saums said.

The town has a capital fund for the building that comes from rent revenues, but it wouldn't be nearly enough to cover the roof replacement, Mayoral Assistant Mark Bancroft said.

Finance Committee Chairman Fred Allyn III said money from the sale of the building would be useful for capital projects in light of reduced state aid.

"It's potentially a half a million dollars we can free up that we can use for future capital projects, not for year-to-year normal spending but to fund our future capital needs that we know are there," he said.

Currently eight tenants occupy the building: Southeastern Connecticut Regional Resource Recovery Association, Pure Fitness, 30 Marketing, Bishop Seabury church, Art in the Village, All About You Massage, Cycle Shed Stores and Kindermusik. Other groups, such as the Ledyard Farmers Market, use the gym as needed.

Many of the tenants came into the building around three years ago as part of a business incubator program.

Tenants' soon-to-expire, three-year leases were a subject of discussion for both committees. Councilors decided that tenants in the incubator program will be given month-to-month lease-renewal options with a 35 percent rent increase after their three-year leases expire.

The incubator program gave each tenant a lease below market rates, and the intent was to gradually escalate the cost toward the market rate for Gales Ferry. Most began paying around $400 a month for a classroom-sized space in the building, with a 10 percent escalation every year.

However, incubator tenants balked at a substantial rate increase to bring them near the market rate at the end of the three-year term, leading councilors to compromise on a 35 percent increase.

n.lynch@theday.com