LYNN — The City Council voted to schedule a public hearing for a proposed bond authorization to purchase the Eastern Bank headquarters at 195 Market St. during its Tuesday meeting.
Mayor Jared Nicholson had requested the hearing, which will be held on June 11, in a letter he wrote to the council. Nicholson said that because of the shift to remote work, only 20% of the bank’s employees at the location are working in person.
“This substantial vacancy presents a unique opportunity to repurpose most of the building for educational needs, including the Frederick Douglass Collegiate Academy and centralizing administrative functions,” Nicholson wrote in the letter. “Lynn Public Schools continues to need additional space to accommodate a growing student population.”
There are 16,022 students enrolled in the district this year, according to the Massachusetts Department of Elementary and Secondary Education.
The city plans to fund the $12 million purchase by issuing municipal bonds. It is estimated that the debt service on those bonds will be $669,000 annually, including principal and interest for 30 years.
Nicholson said it would cost less than the amount the district currently pays to lease various properties throughout the city for educational purposes, which is roughly $750,000 annually. He added that the city has the necessary borrowing capacity to issue the bonds.
Because lease payments do not count toward net school spending, Nicholson said, after three years they would become city expenses, meaning that acquiring the property would have no impact on the budget.
Nicholson told The Item that the purchase would have the benefit of preserving and activating some of the best office space in the city, contributing to the downtown’s economic development.
“We recognize that addressing overcrowding in the schools is one of the top priorities we have in this community, and this represents a really great opportunity to do that. I’m very grateful for the partnership with Eastern Bank, as well as the City Council and Lynn Public Schools and the many folks that are involved in a transaction of this size,” Nicholson said.
While Nicholson said there are still many steps left in the process of purchasing the property, it represents an opportunity for Eastern Bank to meet its business needs.
“It creates a real win-win-win for the city, the school department, the folks at Eastern Bank, and the community,” Nicholson said.
Nicholson said part of the contract with Eastern Bank outlines a lease that would allow the bank to lease space back from the city “at least through September 2025.”
