ASHLAND — Lithia Springs Resort plans to begin work this fall on a multi-million-dollar expansion that will make its spa much more visible.

ASHLAND — Lithia Springs Resort plans to begin work this fall on a multi-million-dollar expansion that will make its spa much more visible.

The plan includes nearly doubling the number of rooms at the resort, which is just off Highway 99 near Ashland's north freeway exit. There also are plans to re-engineer the intersection of Highway 99 and build a barn-style wine-tasting center at the roadside that will feature selections from Oregon wineries.

"We want it to be a real icon," resort co-owner Duane Smith said.

The resort opened in 1991. Smith said the entire property was a mess of blackberries and thistles when he purchased it. Now it is an 8.5-acre getaway for tourists. The resort sits atop a rich mineral-water deposit, which provides it with the Lithia spring water that gave the resort its name.

Expansion has been on the minds of Smith and fellow co-owners John and Kathy Chmelir for a while. But it took them years to acquire the final piece of land necessary to make it happen. Mr. C's Convenience Store and the former site of El Tapatio Mexican restaurant sat on that small patch of land, standing between the highway and the resort, effectively blocking it from sight.

"We hadn't been very visible behind the old buildings," Smith said.

They bought the rights to that land five years ago, but had to wait for El Tapatio to relocate. That happened in December, and now that the buildings have been demolished and the ground leveled, new construction can get under way.

The resort was granted a permit to add cottages in May, and approval for the wine barn is pending.

The full plan calls for adding 12 cottage-style rooms to the resort's current 16. At the same time, the owners will foot a $500,000 bill to create a four-way intersection where the highway meets West Jackson Road. The redesigned intersection will increase traffic flow near the resort's entrance, and make it more accessible to travelers coming off of Interstate 5 at exit 19.

"In October we'll begin," Smith said. "The cottages could be done by the spring."

Smith said he has been pleasantly surprised with the pace of business this summer. Expecting the recession to keep profits low, and fearing what impact that may have on expansion plans, he instead finds himself busier than ever.

"Things are looking good," he said. "We plan to move ahead this fall, but it's all very much wait and see."

The wine barn may be a full year away, but along with a small vineyard they own out front, the owners expect it to be a town staple from the moment it is installed.

"It will be the gateway to Ashland," Smith said.