GRAY – Fifteen leaders of Gray, New Gloucester and SAD 15 met this week to review a proposed lease with the town becoming landlord of Pennell Institute and, SAD 15, the tenant.

If Gray voters decide to move their town hall to Pennell Institute and lease a portion of the building to SAD 15 for offices, that would solve disposing of the nearly vacant, century-old landmark in Gray Village.

New Gloucester leaders are waiting as the school district tries to find a way to dispose of the building and preserve the educational trust established in 1880 when the building and money were left to the town by Henry Pennell to educate its students.

In 1962, when SAD 15 was formed between Gray and New Gloucester, the building was conveyed to the district.

The possible lease arrangement to transfer the ownership back to the town and uphold the educational trust would require approval by Maine’s Attorney General and then by Gray voters.

The building was recently appraised at $1.8 million by the James W. Sewall Co. of Old Town. It needs approximately $1.5 million in repairs and renovations.

The building has historical significance to Gray residents who were educated in this community landmark. The town’s Historical Society uses a second story for a museum. And funds were raised privately to repair the building’s clock tower.

Gray wants the building back. But the Maine Attorney General’s Office ruled last year that SAD 15 can dispose of the asset at fair market value and the proceeds be used to preserve the educational mission of Pennell’s trust to educate local students.

The issue is further complicated because space is needed by the school district’s administrative staff and by the Gray municipal offices, both located on Route 26. The municipal building is too small for current needs and the school district’s building needs repairs.

Two years ago Gray purchased the former post office next to the Town Hall. No action has been taken to expand and meet the town’s need for additional space until officials determine a preferred plan.

The SAD 15 administrative office needs $75,000 in renovations.

A 10-year lease to SAD 15, with three five-year renewals, is being considered. The group plans to meet on May 10 to continue deliberations.

If voters turn the plan down, Gray Town Councilor Lynn Olson said the town office would move into a trailer and level both town-owned buildings and build from scratch.