PORT TOWNSEND – Jefferson Healthcare hospital commissioners plan to purchase a $5 million building across Sheridan Street from the hospital.

“We’re getting space for ourselves to put offices eventually,” said Jefferson Healthcare Chief Executive Officer Vic Dirksen during Wednesday’s meeting.

“This [building] better enables you to use our current campus for medical office space.”

Four of the five Public Health Care Services District #2 commissioners voted May 2 to send a letter of intent to Jim and Noreen McCarron, owners of the two-story building at 915 Sheridan St., to purchase the structure for $4,998,750.

The dissenting vote came from Commissioner Tony DeLeo, who questioned compatibility of the facility with the hospital’s needs and the cost over time because of interest.

Dirksen also said that the price, even with the interest included over a 20-year period, would be a small fraction of the hospital district’s budget.

The current occupants of the upper floor of the building, which totals about 14,000 square feet, are the state Department of Social and Health Services, which has a lease that expires in 2015, and the Olympic Area Agency on Aging with a lease expiring in 2011.

The ground floor, another 14,000 square feet, is unfinished.

“It’s capable of being clinic space, but it would require remodeling,” Dirksen said of the ground floor.

The payment terms stipulate a down payment of $150,000 with a 6 percent interest rate per year on the remaining balance of the purchase price.

The interest payments would be made monthly.

Any time after the 10th year, the district may choose to begin paying principal at a rate no greater than 10 percent of the purchase price per year.

The closing date will be no later than June 30 of this year.

The hospital district will receive rental payments from the two current occupants totaling approximately $262,500 per year.

The existing leases contain provisions for rent increases during current lease terms.

At Wednesday’s meeting, it was decided that Commissioners Jill Buhler and Chuck Russel will sit down with Jefferson Healthcare Chief Financial Officer Jim Chaney to go through the details of the cost of the purchase and its effects over the next 20 years.