The council will spend £2.85m on a mystery building in York city centre.
The purchase was given the green light by senior councillors at a meeting on Thursday.
But details about which property City of York Council is set to buy remain a secret.
Tracey Carter, the council’s assistant director for economic growth, said:
The details of the property are confidential until the sale is agreed and this confidentiality was a condition of the vendor accepting our offer.
What I can say is that the property in question will enable us to work with adjoining landowners to explore the remodelling of the surrounding area to give the area a new and brighter future, with the potential for bringing unused spaces on upper floors into residential occupation and creating new routes around the city, as well as supporting the retail environment within the city centre.
She added that the local authority will use the rental revenue to pay off the £2.85m cost of the property, saying: “It’s an important intervention into the future of the high street that will help promote regeneration to address the challenges of the city centre, whilst representing good value to the public purse.”
The council owns a number of properties in the city centre that are rented out to businesses – including Swinegate Court.
A report says the building the authority wants to buy is “a hugely significant asset at the heart of York city centre” and is already rented out.
Cllr Nigel Ayre said:
The council owns and manages a non housing portfolio of about £335m.
It provides an income to the council of about £6.4m. It’s good to note that from 2015/16 – when the income was about £3.9m – that’s now up to nearly £5.8m.
It’s not about making money – it’s money that’s going back into front line services.
When we’re not in a confidential situation, we’ll be able to expand further on what those benefits to the city of buying this building might be
But he added: “I want to ask about the strategy for investment in commercial property.
“I just want to ask about the other high profile cases in the city like Bootham Park and Lendal Post Office – given that those are public sector owned and given we have more leverage when we are buying from public sector organisations I would like to understand what the strategy is.”
The meeting heard that a new report about Bootham Park will be published in the new year and that the post office was privately owned.
Ms Carter said the council “reviewed the potential benefits” of buying the post office but said: “We did not believe that that had a viable business case for the council and did not perform the kind of strategic function that this particular acquisition is making.”