PROVIDENCE, R.I. (WPRI) — Providence Mayor Brett Smiley says he’s hopeful the city will assume ownership of the Cranston Street Armory, but he’s unwilling to strike a deal without “a check from the state.”

The first-term mayor said Wednesday negotiations with Gov. Dan McKee to take over ownership of the state-owned building will likely continue throughout the fall. And while he’s hopeful the talks will result in the city taking control of the long-defunct building, he’s wary about city taxpayers having to pay for years of deferred maintenance under state ownership.

“I’m in discussions with the governor about taking the keys, but it also needs to come with a check from the state,” Smiley told 12 News. “There’s significant deferred maintenance.”

The negotiations began last month when McKee canceled a state contract with Scout Ltd., the company previously leading an effort to redevelop the historic building. At the time, a state-hired consultant JLL issued a report showing in part a Scout proposed plan would lose the state $10.5 million over the next 15 years.

But the relationship with Scout also ended after company executives spent months publicly feuding with McKee, triggered in part by a highly controversial business trip that two former state directors took in March to visit Scout executives in Philadelphia.

The trip has since sparked a criminal investigation, along with a separate state ethics probe into the directors’ behavior. McKee is also under an ethics investigation for accepting a free lunch paid for by Scout lobbyist Jeff Britt in January.

McKee officials insist the Scout agreement only fell through because the plan would lose money, come with high development fees and include too much retail space that’s become less popular in a post-pandemic era. The governor has said the city is a bitter fit to deal with the building and whatever comes next.

“We’ve come to the conclusion that this is a local, community project — not a state project,” McKee said after canceling the contract with Scout.

But Smiley’s concerns about the cost of taking over the building are warranted.

Target 12 obtained internal documents earlier this year showing taxpayers would spend between $2 million and $3.5 million each year just to maintain the empty building, which is deteriorating and has substantial structural and plumbing issues. And those costs could become the biggest friction point during negotiations in the coming months.

Smiley said the city is “very open” to taking over the Armory, but only “if we can come to terms with the state on what is an adequate amount of funding that comes with the project to make sure the state’s deferred maintenance doesn’t become a burden to city taxpayers.”

Kim Kalunian contributed to this report.