Urban League of Metropolitan Seattle sold its three-story, 101-year-old headquarters to Retail Lockbox owner Craig Dawson for $2.7 million.

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The Urban League of Metropolitan Seattle has a new lease on life.

The financially wounded civil-rights group sold its three-story, 101-year-old headquarters at East Yesler Way and 14th Avenue for $2.7 million in a deal that closed Friday.

The proceeds will go to pay off debts and hire a new CEO. The league will remain in the building as a tenant for at least three years. “It’s good to know we are able to get back on our feet and proceed; 2011 was a tough year,” said Walle Ralkowski, Urban League interim board chairman.

A national search is under way for a new CEO.

Craig Dawson, a local business owner, bought the Urban League building along with his partner, Walt Townes. Dawson will move his payment-processing and digital-storage company, Retail Lockbox, into the 38,000-square-foot building with adjacent parking lot.

The former president of African-American business group Tabor 100, Dawson said that it was nice to help the league but that the deal was mostly a business decision.

Retail Lockbox had outgrown its building in South Lake Union, and rented space as well. It was looking for a place where it could consolidate operations and about 100 employees.

Retail Lockbox sold its property to Equity Residential of Chicago, the country’s biggest publicly traded apartment developer, for $2 million earlier this month.

The league was asking for $3.6 million when it put its headquarters on the market last July. Dawson said his company planned to renovate the building.

The league’s financial health was hurt by a drop in government funding and fallout from last year’s Seattle Public Schools scandal. State auditors found that the schools might have wasted money in trying to help minority firms get school-construction work. The biggest questionable expense, the audit concluded, was nearly $600,000 to the Urban League to pay for minority-business outreach and training.

Shortly after the audit, the league’s board closed its contractor center. It also laid off employees — as staff shrank from 40 employees to a handful — and acting CEO Tony Benjamin stepped down. Benjamin had blamed “negative publicity” from the schools scandal for damaging the league’s reputation and its ability to renew some contracts.

More recently, the group has been working on a turnaround plan partly under the direction of the National Urban League. Marc Morial, president of the National Urban League, said last year that the Seattle chapter was too important to fail and that the national group was committed to its recovery.

The local board last year brought in former longtime Urban League CEO James Kelly to help the group. Kelly has finished his unpaid stint and is now looking for work, he says, and doing some consulting.

The league cooperated with police investigations into the schools scandal, which led to the arrest of former schools official Silas Potter. Kelly maintains the league did nothing wrong but lacked some detailed documentation, which raised questions by auditors.

The league’s rebirth, Ralkowski said, will focus on rebuilding programs in four areas: housing, education, employment and health. “My mission is to attract new corporate sponsors as well as board members to carry the torch,” he said.

Seattle Times business reporter Eric Pryne contributed to this report.

Bob Young: 206-464-2174 or byoung@seattletimes.com