The Memphis City Council agreed Tuesday to purchase the former Donnelly J. Hill State Office Building for $1.5 million and begin a renovation and moving project that will push the entire project to more than $8 million.
The state vacated the building last year, and its offices are now housed down Main Street at One Commerce Square. The building is a Civic Plaza neighbor of Memphis City Hall located just across the trolley tracks at 170 N. Main. City officials have been in negotiations with the state since last summer to buy the building.
The original deal was a swap. The state would give the city the 12-story, 44-year-old building in exchange for the use of 400 parking spaces at the Peabody Place garage for 15 years. The parking spots were valued at around $2.2 million for the term. The deal wash canned to an outright purchase in August for $2.2 million.
The final deal approved by council Tuesday has the city buying the building for $1.5 million. But the city will spend more than $6.2 million to renovate the building and $680,000 to relocate several city offices to the building.
So far, the Memphis Police Department will be the building’s biggest tenant and will leave its current headquarters at 201 Poplar. The new city building will also house the division of Housing and Community Development, the Memphis Housing Authority, and some smaller divisions.