This week, Wilmington leaders will consider leasing office space in two city-owned buildings to a federal government agency and a Canadian rapid manufacturing firm.

Since consolidating city offices into the former Thermo Fisher Scientific building starting last summer, Wilmington officials have worked to sell or lease other underutilized city office buildings downtown. The Wilmington City Council will consider the latest leases at its regular meeting on Tuesday.

According to the meeting’s agenda, one lease being considered is for the U.S. General Services Administration. The government agency would lease just over 7,900 square feet on the fifth floor of an office building at 115 N. Third St., along with 28 parking spaces on the top floor of a parking deck at 114 N. Second St.

City leaders will consider an initial 10-year lease for the agency at an annual rental rate of $498,000 with periodic increases and the option to renew the lease for an additional five years.

But to lease the space, the city would have to make improvements to the building and parking deck that are expected to cost $1.8 million. That includes adding a secure parking deck area for federal employees along with other interior upfits.

Approximately $600,000 of that investment would be amortized for the initial 10-year lease term, while the remaining amount would be reimbursed to the city upon delivery of the space, which is expected in January 2026, according to the agenda.

“The investment in the property is substantial, but it comes with the potential for great benefit to the city by bringing the occupancy rate in the building up to approximately 55%,” the agenda states.

The building’s occupancy rate is currently 35% with three leases. The building operates in a “break-even” state, with its approximately $400,000 in annual revenues narrowly exceeding its $380,000 in yearly operating costs, according to a memo included with the council’s agenda.

The agenda notes that a long-term federal lease would be a “solid attraction for investors looking for dependable cash flow.” However, it would also tie the office building at 115 N. Third St. and the parking deck at 114 N. Second St. together and could reduce options for selling the properties separately, the agenda states.

If the Wilmington City Council votes to move forward with the lease resolution, a separate ordinance would come before the council in September to allocate funding for the improvements.

The other lease agreement set to come before the council would lease nearly 3,200 square feet of space on the fourth floor of Skyline Center at 929 N. Front St. to Protocase USA, Inc. Protocase is a rapid manufacturing and prototyping firm based in Nova Scotia that serves the aerospace and defense industries. The company announced earlier this year that it had chosen Wilmington for its first expansion into the U.S.

The company specializes in rapidly producing fabricated parts from sheet metal and other materials for innovators across various industries. Such custom materials can often take days or weeks for other firms to make. Within five years, the company aims to establish a manufacturing facility in the Wilmington area that could employ around 400 people.

The Protocase lease has an initial term of three years and an option for a four-year extension. The lease would cost the company nearly $93,800 each year and would increase annually.

In recent months, city leaders have leased space in the Skyline Center to a range of tenants, including Raleigh-based bank Local Government Federal Credit Union, Wilmington nonprofit Leading Into New Communities, Inc. (LINC) and the Wilmington and Beaches Convention & Visitors Bureau, among others.

Correction: This version of the story corrects the name of the U.S. General Services Administration.