LEBANON — The city is eyeing a new property acquisition that would help clear the way for a planned traffic roundabout, as well as a potential location for a temporary homeless shelter.

On Wednesday the City Council voted 7-1 to authorize City Manager Shaun Mulholland to negotiate the purchase of 160 Mechanic St., a single-level commercial building on less than a quarter-acre of land.

Mulholland told the council that he has reached an agreement with the property owners, Laurentide Properties, of Lebanon, to purchase the parcel for $400,000.

The City Council will hold a public hearing on July 19 to consider authorizing a $425,000 bond, which also will fund an environmental assessment and the legal expenses to close the deal.

The property is located in the right of way of a planned roundabout at the intersection of Mechanic Street and Slayton Hill Road. The commercial building will need to be removed before the start of construction, which is tentatively scheduled for 2029.

The roundabout project is included in the state Department of Transportation’s current 10-year plan. The state estimated the project cost last year at $4.7 million, which Mulholland said he expects will be considerably higher when construction begins. Preliminary engineering is scheduled for 2025.

The state is committed to cover up to $3 million of the project.

“(Our) primary request is to purchase this property now to pay for it in 2023 dollars,” Mulholland explained to councilors. “If we wait until 2029, it will fall under rules and requirements of New Hampshire DOT and the federal government that would also involve relocation costs of any businesses that are located there.”

Currently 160 Mechanic St. is leased by High Meadow Builders, a construction and remodeling business. But Mulholland said their lease expires at the end of August and the tenants declined an offer to purchase the property.

In the short term, the city hopes to convert the property into a seasonal homeless shelter, which would operate during the months of December through March and house up to 15 people.

In May, the council directed Mulholland to identify feasible sites for a seasonal shelter, as well as cost estimates for construction, to present to the council for consideration.

“We will have to do the feasibility to determine if that’s viable, but on its face it looks like it is … at least over this particular winter,” Mulholland said.

According to a report from the Lebanon Department of Human Services, the city is one of the largest municipalities in New Hampshire without a homeless shelter. The closest shelters are the Upper Valley Haven in White River Junction and the Sullivan County shelter in Claremont, which often do not have available beds.

Mulholland noted that the Haven is considering the acquisition of the former “25,000 Gifts” building in White River Junction to build a low-barrier shelter, which Mulholland said “would be the ideal location for a larger shelter.”

“Our plan is to regionally operate with that and to provide some funding for it,” Mulholland said. “But that plan hasn’t been approved yet.”

Michael Redmond, the Haven’s executive director, said that the project is still in an early development phase. The Haven held multiple meetings with neighbors and businesses to solicit feedback and have met with town staff and public transportation officials from VTrans for preliminary conversations. If the Haven decides to proceed with the project, Redmond said a plan may be submitted for consideration by town planning and zoning boards “later this year.”

But even if a project is approved, Redmond said the shelter, which will require a renovation of the existing building, would not be open in time for the upcoming winter.

A shelter at 160 Mechanic St., if approved, would have to cease operations once construction of the roundabout is ready to commence.

City Councilor Chris Simon cast the lone vote against the property acquisition.

“We’ve purchased a lot of properties that are coming off the tax roll, and we need to start putting some of those properties back on the tax roll,” Simon explained.

On June 2, the city finalized the acquisition of 14, 28 and 30 Main St. from real estate firm Chiplin Enterprises for $1.75 million. The City Council is still considering options for these properties, which could include a public use — such as a new West Lebanon fire station — or redeveloping through a private-public partnership.

The public hearing for the proposed bond will be held on Wednesday, July 19 at 6 p.m. in City Hall.

Patrick Adrian can be reached at padrian@vnews.com or at 603-727-3216.

CORRECTION: A proposal by the Upper Valley Haven to build a new low-barrier shelter would entail renovating the former  25,000 Gifts building. A previous version of this story incorrectly described the plan.