Could the 15,000 square-foot Carnegie Building – long considered a financial liability for the city and tenants due its size, age and required upkeep – at some point become a money-maker instead?

That's the scenario city officials are evaluating as they negotiate a proposed three-way lease agreement between the city, History Center of Traverse City and Crooked Tree Arts Center Traverse City. Last week, city commissioners and representatives of the two nonprofits met to discuss an arrangement that would make the city the third tenant in the 110-year-old building – giving the city a venue it could rent out for public use and events.

Under the proposal, the city would maintain control of a portion of the upper level of the building and some common areas on the lower floor. Crooked Tree would occupy space on both floors, paying up to $25,000 annually to the city, while the History Center would move to the lower level and pay up to $9,000 annually. Several nonprofits now in the building – including the Railroad Historical Society, Women's History Project and University Women – would vacate the premises. The building would remain available as a polling station during elections.

In the new city-controlled areas, City Manager Jered Ottenwess says he can “envision a range of events” taking place that could help create a revenue stream for the city and cover the building's costly upkeep. “Specific functions or events...are still open questions,” says Ottenwess. “I don't think we'd necessarily be interested in renting it out for small parties. We're looking more at public use (opportunities).”

As one example, the city is proposing taking over Festival of Trains – an event that raises between $30,000-$40,000 annually for the History Center. History Center Executive Director Maddie Lundy says her group isn't opposed to turning the fundraiser over to the city – the History Center wouldn't have room to host the event under the building's new space configuration – but points out the festival is “a ton of work.”

“We did tell the ad hoc committee (of city commissioners) that if they wanted our help with it, they'd need to contract with us for that,” says Lundy.

Ottenwess agrees that contracts – particularly when it comes to events – will play a key role in any new plan for the Carnegie Building. In addition to the lease agreements with Crooked Tree and the History Center – still being hammered out with many questions outstanding – the city could contract with one or both organizations to cover other services. Crooked Tree's event management experience could lend itself to overseeing rentals for the city, for example, while the History Center could contract for the management and/or deaccessioning of the city-owned Con Foster collection.

Alternatively, the city could go through a request for proposals (RFP) process to find outside providers to fill one or both of those roles, says Ottenwess. In either scenario, commissioners will likely want to develop an event and usage policy for the Carnegie Building as they have done for other city venues including the Open Space.

“It's unlikely you can untangle all these issues from each other,” says Ottenwess of the myriad components to the lease discussions, which will continue when the ad hoc committee reconvenes in early January. “They're all connected. I think that's to be expected when you're dealing with three different parties...and a total change of use of a building.”