A $2 million deal has been struck that would allow Jackson County to buy the four-story U.S. Postal Service building in downtown Medford and convert it into a central complex for more than 200 health services employees.

A $2 million deal has been struck that would allow Jackson County to buy the four-story U.S. Postal Service building in downtown Medford and convert it into a central complex for more than 200 health services employees.

"I think we can confirm the deal is pretty well clinched," said Commissioner C.W. Smith.

Commissioners will vote today on the purchase agreement with the U.S. Postal Service, which will tender a $125,000 deposit and shoot for a closing date of Sept. 15.

The Postal Service, which plans to look for a replacement space downtown, would lease back a portion of the building for nine months at a monthly rate of $16,650.

Alvin Luka, a 62-year-old Central Point resident who frequents the Medford post office, said the current location has been convenient for him, but he is open to a new address.

"As long as it's in the same general location," he said. Luka and other customers said they hoped the post office would find a new building that provides better parking.

During the next nine months, the county will work with architects and engineers to remodel the interior of the 80,000-square-foot building at 333 W. Eighth St. to consolidate health and human services that are now spread throughout Medford. The structure will be brought up to current seismic standards.

The building had been on the market for $3.3 million, but the price agreed upon by the Postal Service is a liitle more than $2 million.

Harvey Bragg, deputy county administrator, said remodeling could cost about $9 million, depending on improvements. Another $7 million could be spent to pay for a parking garage that could be up to four stories tall with 380 spaces.

The county will use reserves it has set aside for the project and won't seek additional dollars from voters. County officials have estimated it would cost $30 million to $50 million to construct a similar-sized building from scratch.

Bragg said the county eventually will recoup some of its investment by selling off buildings on East Main Street that currently house health services.

The county has a rainy-day fund of $66 million as of last fiscal year. Because of the health services building and other projects, that amount will drop to $45.3 million by the end of this fiscal year, Bragg said.

The county is undertaking other capital improvement projects such as the multi-year renovation of the Jackson County Courthouse and creating new headquarters for the sheriff's department.

Consolidating health services under one roof will make it easier for veterans, seniors and the disabled, who currently must cross Main Street to travel from building to building.

"People are wandering around for the service they need right now," Bragg said.

Bragg said the old health buildings have been remodeled so often that light switches don't work in some rooms and the thermostats located in one part of a building operate the air-conditioning in another part.

The new facility will feature one intake area that will direct customer traffic. Bragg said the filing systems also will be greatly improved.

A separate arrangement that would have created additional space in the post office building for state health services employees has been tabled, Bragg said. The county was hoping to reach an agreement with the state that would have offset some of the remodeling costs.

As soon as the post office vacates the building, the county will begin the remodeling, Bragg said. He estimated health services could move in two to three years from now.

Ron Anderson, a customer relation coordinator for the Postal Service's Portland district, said the Postal Service is already looking at possible new locations.

"We are intent on staying in the downtown corridor," he said.

Letter carrier operations are being transferred to the Postal Service's Sage Road center, so only retail and post office boxes will be transferred to the new location.

Anderson said the postal service is confident it can find a new location, remodel the building and move its operation within the nine-month period.

Reach reporter Damian Mann at 541-776-4476, or email dmann@mailtribune.com.