GRAY — The future of the Maine Narrow Gauge Railroad Co. & Museum is now in the hands of Gray voters.

On the town’s ballot in November will be a proposal to grant the nonprofit museum nearly $500,000, which would help fund its move from Portland to Gray. The Town Council voted 3-1 Tuesday night to send the question to a referendum.

“Let the folks have a choice in it,” Chairman Matthew Sturgis said. “When you’re talking about spending half a million bucks, let people lend their voice to it.”

During the summer and the holiday season, the Maine Narrow Gauge Railroad offers rides in a historic passenger train along 1.5 miles of Portland’s eastern waterfront. The museum has a lease agreement for 7,500 square feet in the Portland Co. complex on Fore Street through 2017, but the landowners plan to redevelop that property. The museum’s board began searching for a new home in 2009 and eventually settled on a parcel next to the Gray Plaza shopping center on Route 100. The new museum is scheduled to open in 2018.

While the nonprofit is in conversation with a number of private funders, Executive Director Donnie Carroll estimated it has raised less than $500,000 in funds and in-kind contributions so far. In a 2014 letter to the Portland Press Herald, Carroll said taxpayers would not pay for the museum’s move. But as the deadline to move looms, town officials have proposed the $498,000 grant to help the Maine Narrow Gauge Railroad cover startup costs like land acquisition, design work and permitting fees.

“It’s not like they came to us looking for money,” Councilor Lynn Gallagher said.

Of the 11 individuals who spoke at the meeting Tuesday night, three opposed the idea of the grant outright. One asked a question, and seven supported the proposal to give money to the Maine Narrow Gauge Railroad.

“Outside funders, whether they’re foundations or federal agencies, would expect to see that whoever is going to benefit from this project has some skin in the game,” said resident Anne Gass, citing her own experience in fundraising. “It’s not at all unusual that the town would be a financial partner in this project.”

Supporters of the grant also said the museum would boost other businesses in Gray. An economic impact study conducted by the museum estimated visitors would bring $1.2 million annually to the town.

“If we had a tourist attraction there, that place would be happening on the weekends,” resident Leo Credit said of the Gray Plaza shopping center. “I would love to see more activity overall in that part of town.”

Ray Clark, president of the Friends of the Maine Wildlife Park, called the museum “a paying proposition.”

“Last year, the wildlife park has 110,000 visitors from all over the world,” Clark said. “A lot of them ask, ‘Is there anything else to do in Gray?’ I think that the railroad would be a good thing for them.”

Opponents, however, did not want to spend taxpayer money on a private project.

“Do I as a taxpayer want to invest in the railroad?” resident James Monroe said. “Not as a taxpayer. If I want to do it, I will do it as a free-will participant.”

Others looked for safeguards if the museum should not meet the rest of its fundraising goals or if it is not successful in its new location. Carroll estimated building and opening the museum in Gray will cost between $4 million and $6 million.

“Change the word ‘grant’ to the word ‘loan’ so if the project fails, at least taxpayers can recoup by repossessing some of their assets,” resident Fran Monroe said.

Town Manager Deborah Cabana estimated the town’s unassigned fund balance is about $768,000 over its target amount, so that surplus would likely be the source of the money. By using those cash reserves, the railroad grant would not have a direct impact on the property tax rate. Gray’s mill rate is $18.05 per $1,000 of assessed property value.

The museum is a nonprofit, but Carroll said he plans to set up a payment in lieu of taxes to the town.

“We don’t want that free ride,” he said.

Only one councilor – Gallagher – voted no. She said she supports the museum coming to town, but wanted to see a written agreement between the town and the nonprofit before a referendum.

“Expending taxpayer money for a public-private partnership is delicate and it’s challenging,” she said.

Town officials have said a written agreement with more details wouldn’t be drafted unless voters approve the idea in the fall; that document would need to return to the council for a public hearing and vote.

“It’s not just a free handout,” Sturgis said. “There are deliverables that need to be accomplished.”

Carroll will make a presentation Thursday evening at the Gray Public Library about the history of narrow gauge railroads in Maine and the museum’s future in the town. The doors open for that event at 6 p.m..

Election Day is Nov. 8.