Jackson County commissioners could strike a deal this week to sell the U.S. Hotel in Jacksonville and divert $1 million of the proceeds to the financially strapped Southern Oregon Historical Society.

Jackson County commissioners could strike a deal this week to sell the U.S. Hotel in Jacksonville and divert $1 million of the proceeds to the financially strapped Southern Oregon Historical Society.

The agreement would allow the society to pay off a $600,000 lien on the History Center in Medford, with the remainder providing operating expenses for about two years.

"If the hotel sells, we can let out a big sigh of relief," said Terrie Martin, president of the SOHS board. "We can stand on our own two feet again."

Jackson County commissioners will decide Thursday on an agreement that would start the process to sell the hotel, which is leased by the county to SOHS.

Several possible buyers have expressed interest in the hotel, but the county is required to put the building up for auction. An undisclosed minimum bid would be required, though the building is valued at roughly $2 million.

After expenses involved in the sale of the building are paid off, SOHS would get $1 million, with the remainder going to the county.

SOHS shut down most of its operations last September while it struggled to reorganize.

The historical society relied on a 1948 levy that set aside property taxes to preserve Jackson County's history.

The county maintains that the historical society lost its entitlement to that money with the passage of measures 47 and 50, which led to the consolidation of levies in 1997. The county won court battles over the issue, but ultimately settled with the historical society to provide three years' funding that ended in 2007.

With its income dried up, SOHS has pulled its operations out of Jacksonville.

SOHS will consolidate its main operations into the History Center, which it owns, at Sixth Street and Central Avenue in Medford. The society preserves a million artifacts in storage and hundreds of thousands of historical documents in its collection.

SOHS plans to reopen its research library on May 4.

Hanley Farm, the society's 40-acre property in Central Point, likely will require a master plan and additional funding before it can reopen.

As the county considers selling off the U.S. Hotel, Commissioner Jack Walker said this will be the first step in severing the county's ties with SOHS.

He said the other historical buildings in Jacksonville should be taken over by the city or subleased to some other local community group.

"The county should just walk out of this thing," he said. "It's not the county's responsibility anymore."

The county and historical society are amending a 2003 lease agreement that creates language to allow for the sale of properties. After expenses are paid out, the proceeds from a sale would be split equally between the county and historical society. The amendment also allows the two parties the option to work out a sale agreement that would give either party a greater share of the proceeds.

No other historical properties are up for sale at this point, though the Catholic Rectory and the Beekman Bank had been suggested previously.

SOHS plans to lease out more buildings, including two small structures behind the Jackson County Museum that might be used to house offices for the Jacksonville City Hall.

Martin said negotiations are still under way with a group in Jacksonville that is creating its own historical society to manage and fund the buildings in its own community.

To avoid confusion with SOHS, the group is considering calling itself the Jacksonville Heritage Association, Martin said.

Steve DeJaray of Vancouver, British Columbia, hopes to sublease part of the 1880 U.S. Hotel for a wine center and wants to remove the balcony over the sidewalks. The society said the balcony is in serious disrepair and is a safety hazard to pedestrians.

A balcony was added to the building within 10 years of its construction. The current balcony is a replica built in the early 1960s.

DeJaray's lease and another lease with U.S. Bank at the hotel would be continued after the sale.

Reach reporter Damian Mann at 776-4476, or e-mail dmann@mailtribune.com.