WESTBROOK – A Westbrook nursing home and elderly housing project that has been stalled for years has encountered another impasse – the City Council.

Councilors on Monday shot down a proposed agreement between the city and the developer of the Stroudwater Street project, once again bringing the issue of traffic and access to center stage.

“I think it’s good to worry about a possible future major expense to the city,” said Councilor Paul Emery.

Sandy River Co., a Portland-based firm that develops property for the health-care industry, is trying to develop a 65.3-acre parcel. Technically, the address is listed as 449 Stroudwater St., but the entire area goes from a point on Stroudwater next to the Animal Refuge League, all the way across to Spring Street, the property’s western edge.

In 1992, Sandy River built Spring Brook, a 146-unit nursing care and assisted living complex, on the Spring Street side, and since then has been trying to find a way to develop the property for elderly housing and care. In 2005, the company got a zoning change so it could build an elderly housing complex there, but the housing crash and economic downturn that began in 2007 put the project on hold.

In June 2011, the company came back to the city with a new, multi-phase project proposal, to begin with a $13 million, 50-bed unit developers call a “memory care facility,” geared toward caring for patients suffering from Alzheimer’s disease and related conditions.

That, according to Daniel J. Maguire, a managing partner at Sandy River, would be the first phase. Phases 2 and 3 would involve a 120-unit independent and assisted living apartment complex, and a 44-unit complex of duplexes and triplexes, again marketed to senior citizens.

But the problem, city officials have argued since 2005, is access. If the only way to get to the new development is on Spring Street, city councilors said Monday night, that would present too much of a traffic problem. City officials at all levels have said to Sandy River that the only way they could back the proposal is if it includes a cut-through road, connecting Spring and Stroudwater streets.

On a map of the proposed project Maguire presented to the councilors on Monday, the road, labeled as “Landing Road,” is clearly visible, but Maguire said Sandy River cannot afford to build the entire road right now.

Maguire said the company has only secured financing for Phase 1, the memory care facility, and can pay to put in half of the road. According to a map of the proposed project, the road is approximately 1,440 feet long.

The agreement proposed Monday night, worked out in lengthy discussions with Sandy River, Town Planner Molly Just, the property owner, who has not been named in the documents, and the city’s attorney, Natalie Burns, gives the city the option to acquire the land where the rest of the road is supposed to be, at no cost, if Sandy River doesn’t complete the second and third phase. The agreement, according to a briefing packet issued to the council on Monday, is designed to make sure that the appropriate portion of land be designated for a roadway, regardless of what Sandy River does.

But at Monday’s meeting, councilors were upset that there was any chance that Sandy River could not complete the road once it began work on the project, a worst-case scenario that could leave the city to figure out how to build – and pay for – finishing the road. Just how much that might cost is not clear right now, but officials estimate it would cost at least $1 million.

“I’m really concerned that this road could not be built,” Councilor Mike Foley said.

When Maguire gave brief remarks touting the project as a public service, Foley took offense, noting his grandfather lives at Spring Brook, and has spent much of his life savings to afford it.

“This is a money-making facility,” Foley said. “It hits home to me to talk about community service. I don’t appreciate that comment at all.”

Maguire apologized for the comment, and Foley went on to say his personal views weren’t coloring his opinion on the project, which some councilors said could be a great benefit to the city, but the exchange set the tone for the rest of the discussion. Councilor John O’Hara noted that the changes in the project’s scope since it began made it difficult to trust that Maguire and Sandy River would finish what they start.

“This project has changed faces upwards of five times,” he said.

Councilor Victor Chau also spoke out against the project, noting that many other developments throughout the city through the years remain half-finished or otherwise lesser than what was initially promised.

“I’d hate to have this happen in this town again,” he said.

Maguire, in defense of the project, said Sandy River didn’t have to finish all three phases before it could finish building the road. Phase 1, he said, would include half of the road, and Phase 2, the assisted living complex, would include funding for the other half.

“It’s large enough to absorb the rest of the road’s costs,” he said. “I guarantee we have every intention of getting to Phase 2.”

But many councilors remained unconvinced. The vote was 4-2 against the proposed agreement, with Emery and Council President Brendan Rielly voting in favor. Councilor Dorothy Aube was absent.

Whether the vote represents a body blow to the project remains unclear. Maguire said at the beginning of Monday’s meeting that he was planning on finishing the closing, or financing paperwork, next week, but that assumed the councilors supported the agreement.

After the vote, Maguire declined to comment before leaving.

When asked if the vote put the project in jeopardy, Just said of Sandy River, “As I understand it, they will have to postpone their closing.”

When asked why he voted against a potentially large tax revenue generator, Councilor Mike Sanphy said, “I’m more concerned with what it will cost taxpayers in the long run.”

Mayor Colleen Hilton, who supported the agreement as a “balance” between the city’s concerns and the developer’s needs, said the project serves a growing need among Maine’s elderly population.

But, she said of the council, “I understand their concerns. I have the same concerns.”