KILLINGLY — Two years after the state loosened its sale restrictions on a former Killingly-based armory, the town is poised to sell the property to a popular local gymnastics business.

Residents on July 9 will decide whether to convey the structure at the corner of Commerce Avenue to Deary’s Gymnastics for $150,000, giving the business ownership of the former National Guard building it’s leased from the town for the last decade.

The armory was conveyed to the town in 1998 with the understanding that if officials decide not to keep it, the property would revert back to the state. The agreement was modified 12 years ago to allow the town to collect $1,000 a month in lease payments from Deary’s.

In 2017, at the urging of town officials, the state legislature approved a conveyance agreement that allowed the town to pay $1 for the property and resell the property to a private party. As part of the agreement, the town cannot sell the building for less than $150,000 and the proceeds get funneled back to the state’s General Fund.

“So the town isn’t collecting any revenue from the sale, but we’re now able to put that property back on our tax rolls,” Town Manager Mary Calorio said. “And this deal gives Deary’s better control of the building they operate from while keeping the town from being responsible for insurance and maintenance expenses.”

Representatives from the gym, which has more than 500 enrolled students, could not immediately be reached for comment. The Deary’s facility is used to train the UConn gymnastics team and several high school teams, including the state champion Woodstock Academy squad.

Town Council member Lynn Laberge said the proposed sale fits with her ethos of getting town-owned property back into private hands and generating tax revenue.

“And this sale means the town’s not making substantial repairs to the building’s roof and back walls,” she said. “The sale benefits the business by making them eligible for loans to make improvements there.”

Since the lease agreement began, Deary’s has made approximately $150,000 worth of interior repairs to the building, with the town has invested roughly $230,000 for roof, exterior and water repair work since it took over the property from the state.

The sale of the property will include a town-owned amphitheater on the armory property, an open concert venue lined with granite steps. Calorio said there was not a substantial capital outlay for the amphitheater construction and the area is rarely used.

If the conveyance is approved next month, Calorio said the sale would be finalized within 45 days of that vote.