SALEM - The Southern Essex Registry of Deeds - one of the city's largest office tenants - will move to Shetland Park for the next five years, but return to a permanent home in downtown Salem after a new court complex is built.

Secretary of State William Galvin has signed a deal that moves the registry to the old Sears credit center at Shetland Park on Congress Street. The lease would last for five years, while construction is underway on the J. Michael Ruane Judicial Center, the future home of the superior, district and juvenile courts.

After the courthouse project wraps up - expected sometime in 2011 - the registry would move into the current Salem District Court building, Galvin said. The plan would keep the registry in downtown Salem and maintain courthouse row along Federal Street. It is currently located at 36 Federal St., next to Salem Superior Court.

"Once we move back, presumably to the district court building, that's it," Galvin said. "That's where it will be for another couple hundred years."

The lease will cost the state $2.8 million over five years, or an average of $565,500 per year.

The deal, finalized late Thursday, marked a last-minute change of plans for the registry. Up until last week, the registry was expected to move permanently into a private office building and ink a 10-year lease. Five property owners submitted bids hoping to lure the registry - with its 60 employees and 120 title examiners - as a permanent tenant.

But Galvin said yesterday he insisted the registry move into "public space" for the long term, instead of paying rent to a private landlord.

"I don't believe public functions ought to be in private space - not when you have plenty of public space available," he said.

Local officials praised the deal yesterday, relieved that a major tenant will - at least in the long term - stay in the downtown.

"It's good news," said state Rep. John Keenan. "Overall, I'm optimistic. It's a good sign for the courthouse project, and it's great for Salem that (the registry) will stay here."

"It makes sense that it would be right in the judicial hub there with the new judicial center," City Council President Matthew Veno said, of the decision to move the registry to the district court building once the lease is up. "It's very important to downtown business and the health of the downtown business district."

The registry is expected to move to Shetland Park by late summer, according to Register of Deeds John O'Brien. As part of the deal, Shetland will renovate the interior and add on to the existing building. It will also provide 164 free, reserved parking spaces for both employees and the public.

Low bidder

Shetland Park was one of two bidders viewed as the leading contenders for the lease, and its price was significantly lower.

The other bidder, Spiros Flomp, owner of the former telephone building at 10 Federal St., had submitted a bid of $4.6 million over five years, or an average of $919,134 per year.

Flomp could not be reached for comment yesterday.

O'Brien said the money the state will save makes the move to Shetland worthwhile - even if it means temporarily leaving the heart of downtown Salem.

"If we can save $350,000 year, I think a 10-minute walk is worth it," he said.

The lease with Shetland contains an option allowing the registry to stay an additional five years if, for example, the courthouse project runs into delays. But O'Brien said the registry can vacate the property anytime after five years by giving Shetland 60 days' written notice.

Tom Kent, the vice president of real estate at Shetland Properties, did not return a phone message seeking comment yesterday.

Meanwhile, the district court building needs extensive renovations before the registry can move in.

David Hark, a commercial real estate agent with the Drumlin Group in Salem, wondered whether the cost to renovate the District Court building might be so high that it rivals the rent to stay at Shetland.

That means Shetland could use the next five years as a chance to lure the registry into a long-term deal after the lease is up, Hark said.

"That has to be their hope," he said. "Economically, it's probably not the greatest deal to spend all this money only to get five years out of it and have the registry leave. I think they start making money after five years."

But the secretary of state was emphatic: the long-term home for the registry is the district court building.

"Shetland is a short-term solution, not a long-term solution," Galvin said.

Staff writer Chris Cassidy can be reached at 978-338-2526 or by e-mail at ccassidy@ecnnews.com.

10-Year Lease Bids

Shetland Park (45 Congress St.) # $6 million

Former telephone building (10 Federal St.) # $9.5 million

Salem Suede factory (72 Flint St.) # $11.5 million

Former Gauthier Motors building (134 Canal St.) # $12.9 million

Former Osram-Sylvania site (401 Bridge St.) # $14.9 million

5-Year Lease Costs

Shetland Park # $2.8 million for five years # $565,000 average per year

Former telephone building # $4.6 million for five years # $919,134 average per year