Cape Elizabeth will let the Cape Nordic ski group lengthen a multi-use trail on the Gull Crest property, but won’t shell out any money for the project.

“We just do not have the money right now to pay for these projects,” said Michael McGovern, town manager of Cape Elizabeth, which could be facing a $500,000 shortfall.

The trail would be used by cross-country skiers, the Cape Elizabeth middle school and high school cross-country track teams, the local snowmobile club, hikers and dog walkers, said Muzzy Barton, a member of Cape Nordic, which is a group of Nordic ski boosters not affiliated with any school.

“It will be a great trail,” Barton said. “Walkers can use it in the afternoon, snowmobilers can enjoy it and it will also allow the schools to host ski meets.”

The Cape Elizabeth Town Council in December approved the group’s request to seek permits for the first part of Phase II of the project, a 1.25-kilometer portion of a planned 6-kilometer loop through the Gull Crest property, off Spurwink Avenue.

In order to move forward with the project, however, the group must raise the necessary funds itself and it may not do any work on site until the town approves all permits.

In December, McGovern told the Town Council that Cape be facing a $500,000 shortfall after excise taxes dropped in the past year. McGovern said at the time the town will need to balance the budget and also not raise taxes to make up for the shortfall.

“The ski group understands the town’s situation,” said Barton.

“We’re looking to continue to lengthen the trail. It’s really something the entire community can use.”

Cape Elizabeth owns the Gull Crest property, which it bought in 1998. It consists of 65 acres of undeveloped land, two multi-use purpose fields, the town dump and recycling center located on the property.

The Cape Nordic Ski group doesn’t have cost estimate for the project, but it wants to cut trees to expand the existing trails.

Progress had stalled on Phase II because of the potential wetland impact, Town Engineer Steve Harding wrote in a memo to McGovern. As a result, Cape Nordic is looking at areas to which it can redirect the trail, Barton said.

In the meantime, however, the group would like to begin work on the 1.25-kilometer section, what Barton calls Phase IIA.

About a half-mile of Phase IIA uses an existing road used by town vehicles, Barton said. The remainder is in upland area, and other parts skirt around a wetland area.

Harding anticipated the group will need permits from the town Planning Board and the state Department of Environmental Protection.

When completed, Phase II would add 4 kilometers to the 2.4-kilometer trail that the group completed in early 2007. Barton said he expects clearing and fundraising for excavation to begin in the spring, with Phase II ready for use next fall.

Currently, many residents use the trails to walk their dogs.

“I think it’s great that they want to expand the trails because there’s no other place in the area like this that is a good outlet for everybody,” said Cape resident Michelle Buckley, who was walking her dogs Bailey and Ollie along the trails Monday. “It’s also good because it is preserving the wetlands and this area and not allowing for commercial development.”

Buckley, who owns dog walking service called Critter Companion, said she also walks client’s dogs along the trails.

The trail is on primarily upland areas of the Gull Crest property.

Bruce Blaisdell said he is happy the trails are expanding because he enjoys walking his 13-year-old dog Taco around the area.

“I like the fact that it’s open and they are creating more spaces for use,” he said Monday. “It’s nice to see not just skiers, but snowmobilers and walkers able to take advantage of the trails.”

According to its Web site, Cape Nordic was founded in 1993. The group sponsors a variety of opportunities and events for Cape Elizabeth youth and adults to participate in and support the competitive, recreational and social aspects of Nordic skiing.

Cape Nordic first approached the Town Council in 2002 about establishing cross-country ski trails on the property. The group believed that having competitive trails in Cape Elizabeth would save the time and costs associated with traveling to other communities for cross-country skiing, and would extend practice and competition time for Cape school teams.