Norwich — Reliance Health has purchased the former Sears building at 2-6 Cliff St. — which the city once had hoped to buy for a police station — for $2.3 million in what agency officials said is both an expansion of services and a consolidation of locations.

Reliance Health, a nonprofit community mental health center, used its real estate holding arm, Chelsea Reliance Realty Inc., to purchase the building from Lord Family Nominee Trust in a complex deal. Two agencies currently leasing space, the state Department of Correction parole office and the Veterans’ Center, will remain and will continue to pay rent to the Lord trust for the next five years, a total of $814,120, Reliance Health officials said. The Lord trust also holds the mortgage, totaling $1.1 million on the property.

The city received $11,570 in property conveyance tax in the transaction, according to records filed at the city clerk's office.

Jeffrey Lord, a member of the trust along with his sister, Kathryn Lord, will continue to oversee maintenance at the building, where he has worked on and off for the past 40 years.

The complex ownership and lease transaction also means that part of the building, the square footage that houses the paying tenants, will remain on city tax rolls as commercial property, while the portions occupied by Reliance Health will be nonprofit, said David Burnett, executive director of Reliance Health.

Carrie Dyer, Reliance Health chief operating officer, said the purchase will trigger a musical chairs game of movement for agency programs and staff. Reliance Health already had leased space in the Cliff Street building for its homeless outreach program, outpatient clinic and two community support teams. Those programs will remain and expand at the building, Dyer said.

A social rehabilitation Teamworks clubhouse now located at 124 Laurel Hill Ave. will move to Cliff Street, and supportive living programs now at 40 Main St. also will move there. Both of those buildings will be vacated and placed on the market for sale or lease, Burnett said. That means both would be returned to the city tax rolls, Burnett said.

Reliance Health will keep its longtime headquarters at 40 Broadway, which will become its business facility, housing administrative offices, business offices, human resources, information technology and professional development and staff training. The agency art gallery also will remain at 40 Broadway.

Reliance Health employs 275 people and provides 18 mental health, housing and support services day programs for people throughout eastern Connecticut.

The agency also owns 11 residential houses throughout the region, which will not be affected by the moves, Dyer said.

Burnett said the moves are part of the 41-year-old agency’s transformation from offering services for people with mental illness to a multiservice mental health agency and community health center. Formerly known as Reliance House, the agency changed its name to Reliance Health a year ago.

“Our vision is to emerge from being the agency that served people just released from the Norwich Hospital to a community wellness organization,” Burnett said. “It’s been a gradual process, but we’re well on the way to doing that.”

Reliance Health has been negotiating with the Lords for the past year, and prior to that, looked at other downtown commercial buildings, old mills and even considered building a new facility. The Cliff Street building is in good structural condition, but will need renovations to fit out the various office and service space, including a “comfortable cafeteria” for clients in the clubhouse setting, Dyer said.

Kathryn Lord said she and her brother are “very pleased and happy” to reach a deal with Reliance Health. She called Reliance Health a good neighbor in downtown Norwich, an agency that “runs its business from a place of love.”

Kathryn Lord said Sears moved out in about 1973, and her uncle, downtown property owner and manager Edward Lord, tried for several years to buy the building, to no avail. The company finally sold it to Lord in 1978, when it was leaking so badly that water poured out of the front door, Kathryn Lord recalled. She said it took 2½ years to renovate the building for commercial use. Ed Lord died in 2009, and nephew Jeff and niece Kathryn Lord took over management of the downtown properties.

In recent years, she said, the family could not find tenants to fill the building at 2-6 Cliff St. In 2012, Norwich voters overwhelmingly defeated a plan by the city to purchase the building for a $33 million police station complex.

c.bessette@theday.com