The city of Delaware and a private partner have hatched a plan to transform a vacant downtown building back into a bustling workplace.

Delaware City Council earlier this month gave City Manager Tom Homan approval to enter into a 10-year lease with Worthington-based COhatch for the first floor and basement of the former Delaware Gazette building, 18 E. William St. The city-owned structure sits directly east of Delaware City Hall near the intersection of William and Sandusky streets.

The revival of the former newspaper office will follow two similar efforts by COhatch in Worthington. The firm rents co-working, event and office space to businesses and community members at a former library and a building previously used as a general store and a theater, both in the Old Worthington neighborhood.

COhatch founder Matthew Davis, a Powell resident, said his firm seeks out distinctive buildings in city centers where people want to be. Beyond its business goals, Davis said COhatch also aims to foster an environment where community-engagement efforts and charitable-giving campaigns can flourish.

“It’s about establishing (a) true community through being in the heart of towns,” he said. “People move to Worthington or Delaware for a reason: They love the town. They love being there. They have a family there.”

Davis said COhatch will refer to the Gazette building site as “the Newsstand” in a nod to its history. The Gazette’s offices now are located a block away at 40 N. Sandusky St.

Davis said he was attracted to the city and the property by the ongoing revitalization of Delaware’s downtown.

“I love walkable communities,” he said. “I love towns (where) people want to improve and live in a great city.”

Under the agreement between the city and COhatch, both parties will share financial responsibility for the rehabilitation of the Gazette building.

Sean Hughes, Delaware’s economic development director, said the city will be responsible for transforming the 9,400 square feet of space in the first floor and basement of the building to what commercial real-estate professionals call a “vanilla box” state.

“It’s essentially like you would move into a brand-new, vacated apartment, where they change the carpet, paint and everything,” he said.

The city has estimated achieving that state could cost up to $1.18 million. City officials expect to recoup about 70 percent of the renovation and financing costs by renting the structure to COhatch for $78,000 per year.

COhatch also would pay for additional improvements to the space, which have been estimated at about $654,000.

After the renovation is complete, the location is expected to feature about 30 private offices, 20 desks and dozens of co-working spaces. The site also will include a game room, a patio and additional community space.

The lease establishes COhatch as a tenant for a 10-year term and gives the firm the option to extend the lease by five years twice. While COhatch’s rent is expected to cover the majority of the city’s costs on the project, Delaware still will pay about $34,000 annually for 15 years before erasing its debt.

Hughes said he views that as the cost of remaking the Gazette building into a usable facility.

“Even if COhatch were to ever leave the building for any reason, we could easily then lease it out to another company,” he said. “We can’t do that now the way the building stands.”

The lease does not include the Gazette building’s second floor. Hughes said the city eventually may build a “connector bridge” between the second floors of the Gazette building and Delaware City Hall and use the site as office and meeting space.

According to city records, the cost of such a bridge has been estimated at about $275,000.

Hughes said the firm’s efforts at revitalizing buildings in Worthington have been impressive.

“I was amazed at what COhatch did with the (old) Worthington library building,” he said. “It still really maintains its historical integrity. You can very much still tell it was that building, but it’s just so much nicer now.”

At the same meeting at which Delaware City Council approved its lease with COhatch, it also came to an agreement with the county and Ohio Wesleyan University to fund the Delaware Entrepreneurial Center.

Under the agreement, OWU will renovate its Stewart Annex, which sits less than a mile southwest of the Gazette building, to add classroom, creative and office spaces for use by entrepreneurs and students.

Davis said he views the entrepreneurial center as “a great complement” to COhatch’s efforts in Delaware. He said the entrepreneurial center could act as an incubator for firms not yet ready to rent space through COhatch.

“I think it’s actually pretty intelligent of the city to do what they did,” Davis said. “The entrepreneurial center (attracts) a certain segment. Some of those companies grow out of their space and can move to (COhatch), which is cool.

“At the end of the day, we fill up with the rest of the people in the town.”

Both the center and the Newsstand are expected to open before the end of the year.