A new five-story, multi-use building is being proposed for downtown Gorham.

Jon and Cindy Smith of Great Falls Construction are seeking a contract zone to allow construction of the Railroad Avenue building for commercial and residential use. At a Town Council meeting Tuesday, Owens McCullough of Sebago Technics was on hand representing Great Falls Construction

The height of a proposed building was unclear Tuesday, but it could reach 60 feet. That would easily eclipse the 35 feet allowed under the town’s rules in the urban commercial zone.

The proposal is being sought for a vacant lot that previously was a lumber yard.

David Galbraith, Gorham zoning administrator, said Wednesday that the town has had only preliminary talk with Great Falls Construction about the project. Galbraith said a contract zone could be required for a number of reasons.

The Town Council voted 6-0 (Councilor Sherrie Benner absent) to send the contract zone proposal to the Planning Board for a public hearing and its recommendation. But, the Town Council would have final approval for a contract zone.

Matthew Robinson, Town Council chairman, said he likes the proposed project.

“I think its a home run for the town,” Robinson said.

The ground floor of the proposed building would be commercial, and a bowling alley with a full restaurant is a possibility.

McCullough said the building could project a railroad theme. The design could be in keeping historically with the Portland and Rochester Railroad line, which once ran through the area.

Parking would include some covered spaces, as well as some on-street spaces.

McCullough hoped that construction could start by late summer. Town Councilor Marla Stelk had concerns about the proposal’s impact on the neighborhood, which includes the more residential Robie Street and the Village Elementary School.

In another discussion, the Town Council met with the School Committee and the town’s legislative delegation about state funding for education. Sen. Amy Volk, R-Scarborough, along with state representatives Andrew McLean, D-Gorham, and Linda Sanborn, D-Gorham, both spoke about potential legislative action to deal with the $23 million state gap in funding for schools.

McLean said Gorham has been projected to lose $170,000 in state funding this year.

“It’s a painful loss,” McLean said. “I want to see more funding for education.”

The delegation spoke of a proposed compromise in the Legislature that could fund $15 million of the state’s gap. The Gorham School Committee is at work on its budget.

Gorham School Committee member Dennis Libby urged the Legislature to act before April 1.

“We can’t wait for June 30,” Libby said. “Time is definitely of the essense.”

Robinson urged the delegation to not accept a compromise because it represents a cut in the state’s educational allocation.

“There’s no end to this madness,” Robinson said about passing more costs to local taxpayers.