LINCOLNVILLE – Residents defeated a referendum Wednesday that would have forced the town to hold a no-reserve auction on the former Dean & Eugley property.

Town Administrator David Kinney reported Wednesday that 108 voted in favor of the measure and 241 voted against it.

The town took possession of the former gas and service station, which dates to the early 1940s, in early 2002 when its owner failed to pay property taxes. The building is deteriorating, and the Department of Environmental Protection has determined that soils on the site are contaminated with petroleum products.

Those petitioning the town to force the referendum argued that the town has held onto the property long enough and should act. They also said the property should be put back on the tax rolls.

Those opposing the no-reserve auction – which would have meant it would have sold regardless of how low the high bid was – said the property could not be easily developed for commercial or residential use because of the contamination. A buyer, especially one offering a low price, might have done nothing with the site, leaving it an eyesore in town, they said.

Opponents also advocate retaining the property to create parking for nearby Breezemere Park and to build hiking trails to connect the park with the Lincolnville Central School property.

The town has held several votes on how to proceed with the property, the most recent in November. The three options on the ballot in November were to sell the property, tear down the building, or retain the property for municipal use.

But selectmen structured that vote with “yes” and “no” choices for each options, and each of the three won more “yes” votes than “no” votes.

Kinney said Wednesday night that the town has sought a legal opinion on how to proceed, and selectmen have been assured they can act on any of the three options approved in November. Selectmen also may consider a new course for the property, he said.

To date, the town has spent about $50,000 cleaning the property.

DEP has said the best course of action would be to leave the foundation intact, but fill it with gravel. A covering such as an asphalt parking lot also would be acceptable.

Any excavation could expose contaminants, DEP has advised.

The property no longer has a functioning septic system.