BAR HARBOR – The proposed development of a visitors center, satellite parking and work force housing on the Log Cabin restaurant property on Route 3 has been abandoned, officials confirmed Friday.

A smaller-scale project, however, might still go forward, the Bar Harbor Town Council chairman said.

Directors of the Bar Harbor Housing Authority on Tuesday voted unanimously not to proceed with the project because of the staggering cost of upgrading water and sewer services to the site, according to Terrance Kelley, housing authority executive director.

The original project was financially viable only if all three partners – the town, housing authority and Chamber of Commerce – joined forces to buy and develop the property. The housing authority would have assumed $700,000 to $800,000 of the $2 million purchase price, Kelley said.

New estimates on upgrading the utilities to accommodate the dormitory-style work force housing were “shocking,” Kelley said, and ranged from $330,000 to $1 million.

“Financially we just can’t make it work. It’s just not feasible,” Kelley said. “The cooperation was super, and everyone was willing to give a little and take a little and see this through, but those numbers were shocking.”

Although the housing portion of the plan would require far more water and sewer than is now available on the site, the two other parts of the plan would not, which leaves open the chance that a smaller project still could work.

“Everything that stands now is sufficient for what we need,” Clare Bingham, executive director of the Bar Harbor Chamber of Commerce, said Friday of the existing utilities that serve the restaurant.

Officials from all three entities were excited about the original project because it would have helped address three major needs of the town: a visitors center for tourists, affordable housing for summer workers, and parking space for visitors and workers to reduce congestion in the downtown.

Town Council Chairman Kenneth Smith confirmed Friday that the original project no longer is possible because of the housing authority’s withdrawal, but left open the possibility that the town and Chamber still could partner on the visitors center and parking elements of the plan.

“There is still some ongoing [talk] that may result in a project being done there,” Smith said. “So if something else comes out of it on a lesser scale, it may still work.”

Bingham agreed. “It’s actually turned out to be a much simpler process” without the housing piece, she said, “so we’re just redesigning the proposal and bringing it forward.”

The Town Council met in closed session Tuesday to discuss the housing authority’s vote but did not make any decisions, according to Town Manager Dana Reed.

Reed expects the council to discuss the proposal again at its next meeting. Any final action on the deal would require voter approval at a special town meeting.