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But the final decision would not be made until after further consultation with Heritage New Zealand to see if there were "any options we haven’t thought of", Maniototo Health Services Ltd (MHSL) general manager Geoff Foster said.
Parts of the exterior of the old Maniototo Hospital building, built in 1929, had a Heritage New Zealand category two classification, Mr Foster said.
There have been other modern additions, repairs and maintenance done to the building since then, and the building’s deteriorating condition was one of the main reasons a new hospital and rest-home is being built in Ranfurly.
Ideas such as using the old hospital building to house the Eden Hore fashion collection or turning it into a tourist hotel have previously been floated by members of the public.
But Mr Foster said board members and hospital management had spent the last 18 months exploring "every possibility" for selling or reusing the old hospital building, but no uses or buyers could be found.
Board members would now prefer to demolish the building, but would wait until mid-year before making their final decision, to allow Heritage New Zealand to make any other suggestions, Mr Foster said.
The new 26-room, $7 million Maniototo Hospital is expected to be completed by the end of the year and start operating next February.
Mr Foster said the board’s next project would be to plan some supported living units, which would be built on the hospital grounds.