After more than two years of trying to conceive a new purpose and new life for an old building, Oak Bluffs selectmen are poised to sign a contract to lease their abandoned town hall to the Steamship Authority for roughly $46,000 a year.

The SSA will gut the building and spend $1 million to renovate it for its new terminal office in the seasonal port.

"It's imminent," said Roger Wey, chairman of the Oak Bluffs board of selectmen. "I can't imagine any great stumbling blocks. It seems like a good fit."

Mr. Wey confirmed that negotiations with two private developers, who proposed constructing a new building modeled after the historic Tivoli dance hall, ended more than a month ago.

"There's no other alternative. That's dead," he said.

The old town hall sits in a prime spot with a waterview at the top of Oak Bluffs avenue, just north of Ocean Park.

Last week, two selectmen and the Oak Bluffs town administrator met in a closed-door session with Carl Walker, the SSA's director of engineering and maintenance. Both sides described the meeting as fruitful.

"We worked out some details, and we feel a new terminal is a good idea, and the town hall is the best alternative," said Mr. Walker.

If selectmen sign off on a deal sometime in the next two to three months, the SSA is prepared to commence its renovation project this coming winter.

The progress in negotiations over the old town hall comes in the midst of some controversy over the Steamship Authority's plans for overall improvements to its Oak Bluffs terminal, pier and car-staging areas.

Last week, Oak Bluffs conservation commission chairman Joan Hughes called for more public hearings to review the SSA's proposal to fill in and pave part of the coastal bank along Seaview avenue extension.

But Mr. Walker, along with at least one selectman, were clear to draw a line between the town hall deal and the larger redesign plans for the terminal. In other words, forging a final agreement on the old municipal building won't hinge on the outcome of the current fracas over upsetting coastal banks.

"The town hall is a positive step, whether terminal improvements continue or not," said Mr. Walker.

"We should be looking at them as two separate and distinct issues," said selectman Kerry Scott, elected to the board last month. "On the face of it, the use of the old town hall [as an SSA terminal] seems to be a project people will get behind."

Ms. Scott, who attended last week's meeting with Mr. Walker, said she is confident the Steamship Authority would do a good job of renovating the old town hall, but she tempered her enthusiasm by demanding a public airing of the proposal before selectmen ink the contract with the SSA.

"At that December town meeting, there was a clear and succinct promise from the board of selectmen to seek public input. That has not happened," she said. "This is a town-owned property, and it honors a citizen who did a lot for the town, and it needs to be handled thoughtfully and sensitively and with lots of public participation."

The building is named after Everett Rogers, a longtime selectman.

Mr. Wey said he would welcome a public forum to hear from residents about the plan to lease the building to the SSA.

Town leaders decided three years ago to abandon the downtown building after several employees working there became ill. While the building was deemed sick, the exact cause of the illnesses was never determined.

Mr. Walker said he is not concerned about the health aspects of the building.

"We've already done a site inspection of the building, and we found no issues with it that would affect anyone's health," he said. "Our intent right now is to completely gut the structure right down to the exterior, taking all the walls, decks and sheetrock out of there."

Architects hired by the SSA have estimated that it would cost more than $1 million to overhaul the building. The proposal handed to selectmen last winter suggested a 50-year lease term and a rate of $46,000 a year for the first ten years.

Neither side would reveal the exact amount of the proposed lease payment now on the table, but said that it is very close to the figure originally proposed.

This week, Oak Bluffs port council representative Marc Hanover urged selectmen to move forward with the entire terminal improvement plan. "It's to our advantage to upgrade the pier," he said. "It would be very beneficial to the town to get a new terminal there."

But there could be some resistance: The town's economic development council had recommended that the prime real estate with a view over Nantucket Sound was worth no less than $100,000 a year to the town.

Last month, the chairman of the economic development council, Peter Martell, told the Gazette that his board would consider going back and seeking new proposals.

Renee Balter, executive director of the Oak Bluffs Association and a member of the economic development board, also cast a critical eye on the deal with the Steamship Authority.

"Selectmen should take a much more aggressive stance in trying to find a bonafide developer who make the [SSA] part of an overall plan and also have the vision to put together a very exciting building," she said.

Money is the other factor.

"The income factor falls far short of what we were told is fair market value. We're selling the town short if we settle for that amount of money," she said.

Ms. Balter had been one of the people in town cheering for the Tivoli project, a three-story commercial building proposed by developers Edward (Ted) Rosbeck and Douglas Abdelnour Jr.

But after almost two months of negotiations with selectmen, the deal fell apart over money. Mr. Rosbeck had offered to pay the town a discounted price for a 99-year-lease, an up-front, lump sum of $500,000.

Both Mr. Wey and Ms. Scott say they back the current plan with the Steamship Authority. Ms. Scott said she was always concerned about using public land for a private enterprise.

Mr. Wey put it all very simply. "You preserve the building," he said, "and there's nothing controversial going in there."