The former private hospital and hotel was saved from demolition on Monday night by a council vote that included a condition that the buying of the building be considered by the city.

Councillor Darren Cameron suggested that a community purchase be canvassed as a way of breaking the impasse over the future of the heritage-listed structure.

Melbourne-based owners Ian and Joy Clark had sought to have Meramie demolished and replaced with four townhouses after having been unable to sell the property.

Cr Cameron said he was "very uncomfortable" with the situation and felt the council had a "moral obligation" to at least consider a council use for the site.

In the 1950s, the council approved additions to the house that are now considered unsympathetic and in the 1980s the city allowed the block to be split with the Meramie Motor Inn built on land previously used for extensive gardens.

IN OTHER NEWS

Cr Cameron said he did not have any ideas on how the building could be used if it came into council's hands.

"I'm very open to ideas and it has to be economically driven," Cr Cameron said.

"We've got to spend ratepayers' money frugally, particularly given the $6 million we've put into COVID-19 assistance."

Mr Clark did not want to comment yesterday on the council's decision or the possibility that the city might buy Meramie.

Albury and District Historical Society president Greg Ryan welcomed the preservation of Meramie and the possible purchase.

"I think it's useful in that it gives us a potential path forward for the structure," Mr Ryan said.

"The concern is that if it's not demolished what are we going to do with it?"

Mr Ryan lauded the councillors vote to save the property which was built in the 1890s for Albury mayor and MP Thomas Griffith.

"This shows us that this group of councillors is serious about preserving our history," he said.

"Whereas if you go back to the 1950s there were decisions made then that in retrospect should never have been made."

Deputy mayor Amanda Cohn argued that approving demolition of Meramie would gave hope to other owners of heritage-listed properties that if they neglected their buildings they could have them razed.

Cr Cameron said he had been inside Meramie in recent months and did not believe its condition was as poor as that presented to the council through reports.

He said he saw drug paraphernalia but no graffiti or vandalism.