"It's right in the middle of the area we're trying to develop," said Merle Elliott, president of Hagerstown/Washington County Industrial Foundation Inc., or CHIEF, which owns the property.
Some local historians became suspicious of the house's future when they showed up for a tour at the home last month and saw heavy equipment, a gasoline can on the porch, and a tank used to hold water samples.
They learned that the foundation intends to demolish the house and a nearby barn, built in 1896, to make room for development.
The threat has stirred members of local historical societies to work together to save the home.
"There are fewer and fewer of these (pre-1800) houses left," said Lee Stine, president of the Washington County Historical Society.
Members of the Middleburg/Mason-Dixon Line Area Historical Society Inc. said they want to conduct a survey of the house to determine how much it would cost to renovate it.
Members believe they can raise the money to save the home and turn it into their headquarters, using the late 1800s-era wooden addition as an office and meeting place, and turning the original home into a museum.
The foundation was renting the house and property to tenants up until a few years ago when it was found that the interior structure was disintegrating, Elliott said.
After looking at the structure, the foundation was quoted a price into the thousands of dollars "just to shore it up," and an estimated $250,000 for a complete renovation, Elliott said.
"We were not interested in renovating the property. We just couldn't justify it," he said.
Historical society members say the house is in good condition considering its age.
"The outside is what's disintegrating. It needs a roof. The inside is 1774 but it's not deteriorating," said Dick Hartle, a member of the local historical society.
In a two-page document drawn up by an attorney, the foundation has given the historical society permission to make an on-site study of the farmhouse and property under five conditions.
But members won't sign the agreement because of the fourth condition which states that the foundation "will be removing the house from the property immediately after your permitted time period" and that they agree not to remain on the property.
"We can't agree with that paragraph," Hartle said.
The foundation will consider moving the house to an area away from development and selling the property "if someone comes up with the big bucks," Elliott said.
But local historians agree that moving the house would be nearly impossible considering its age and it would take away from its historical value.
"You just don't move a house like this. It needs to be preserved," Stine said.