NORTHAMPTON - After receiving assurances that money will not come out of city coffers to renovate and operate the James House downtown as an adult learning center, the Finance Committee threw its support behind the concept Thursday.

The committee will recommend that the City Council pass a resolution at its Sept. 4 meeting declaring the building as surplus and allowing Mayor Clare Higgins to begin negotiating leases with the tenants that would occupy space in the historic, city-owned building on Gothic Street.

The new learning center would become the permanent home for the Literacy Project, the Center for New Americans, and the satellite Hampshire County office for the Department of Transitional Assistance. Additionally, Greenfield Community College and Holyoke Community College would use classroom space to offer college transition classes, and Westfield State College would like to lease space for college credit classes.

The City Council liked the general idea of the plan when it was presented in June, but some members were concerned that the city might have to subsidize the renovation and operating costs.

"It's a sore subject if we have to spend money," said Finance Committee member David Murphy.

Higgins assured the committee that the city will not dip into its bank account.

"We think we can put this together without any city dollars," she said.

The Northampton Community Education Consortium, the group behind the idea, estimates that it would cost $400,000 to prep the building for use and another $100,000 in annual operational expenses. Included in those expenses are six more years of debt payments the city must make. The city will pay $38,000 this fiscal year.

Higgins said rent payments from the five tenants would cover the operational expenses, but would not pay for the debt service. That cost would be covered by a Massachusetts Executive Office of Labor and Workforce Development grant.

The city would then seek donations for the renovation, Higgins said.

Murphy, owner of The Murphys Realtors Inc., confirmed that the leases will be short term - two to three years - so the city won't be tied into long-term agreements if it decides to sell the building when the market turns around.

The consortium determined that selling the building is not a financially sound option right now, nor is renovating and leasing space at higher rates, Higgins said.

The consortium also considered mothballing the 7,000-square-foot building, but ultimately discarded this idea because it would still leave the city with the debt payments plus another $12,000 to $14,000 to keep up an empty building.

Chad Cain can be reached at ccain@gazettenet.com.