MEDWAY – Town efforts to create a recreation or community center on Medway Road off the Penobscot River’s East Branch may have been dealt a setback from a recent grant refusal, but town officials won’t stop there.

They want to put a new bath center and changing facility at the town recreation area on the road, but the state Community Development Block Grant request for $300,000 for the project was turned down, town officials said.

The state Office of Community Development reviewed the application but rejected it, finding that the town had too few residents who had low to moderate income, or LMI, levels, in accordance with grant specifications, according to a letter from Orman Whitcomb, office director.

Lee described the application, the town’s first, as hurried by deadline pressure. She and John Farrington, chairman of the Board of Selectmen, promised that the town would reapply for the grant.

“Then we’ll go from there,” Farrington said Wednesday.

The grant specified that half the town’s population had to be below LMI levels. The town had about 41 percent, Whitcomb wrote.

Lee said more recent LMI data probably will help secure the grant at the next application.

Farrington said he believes the grant would pay only for new restrooms and changing rooms accessible to residents with disabilities and other patrons, but conceded there has been a lot of speculation about the grant and the need to replace the town’s ancient and rather decrepit facilities at the recreation area.

Farrington, Lee and Selectman James Lee said the town needed to take advantage of the beach along the river by building something better there. Such a recreation center would be a boon to town residents while helping draw more people and business into the area.

“There is so much down there that is not being utilized,” Kathy Lee said. “Town residents could use that area for baptisms, class reunions, weddings. It could be really nice.”

Town officials have been discussing building a recreation center for about 18 months, but no plans have been made final or timelines set, James Lee said. Nor have any costs been estimated.

Selectmen would have to agree to the concept before anything could be pursued, Farrington said.

“It could be a really great thing for the town,” James Lee said.

James Lee and former Selectman Bruce Jones want to form a committee to begin raising funds and brainstorming for a recreation center. Anyone interested in participating is asked to call Kathy Lee at 746-3370.

Lee said he hoped to have a first committee meeting after Jan. 1.